Types of Policies
If current interest rates exceed expectations in an interest-sensitive whole life policy, what options may the insurer offer the owner?
Answer and explanation
Answer: C. When current interest rates exceed the guaranteed rate, the excess yield can be used to reduce future premium requirements or accelerate cash value growth.Source: NAIC Buyer's Guide — PDF page 5, Interest-Sensitive Features
More types of policies questions
- A 45-year-old buys an annuity intending to take income at 65. Which annuity classification describes the contract during those twenty years?
- A buyer wants a deferred annuity funded entirely with one lump-sum purchase payment. Which funding form should be selected?
- A buyer wants lifetime life insurance funded by one lump-sum payment and wants cash value available immediately. Which policy fits?
- A buyer wants permanent coverage whose credited values respond more quickly to current interest-rate changes than traditional whole life. Which product is the closest match?
- A buyer wants permanent life insurance and wants the scheduled premium obligation to end at age 65 while coverage can continue for life. Which policy design fits?
- A buyer wants to fund a deferred annuity through a series of purchase payments rather than one lump sum. Which funding pattern should the buyer select?
590 Texas questions like this one.
Every answer explained, the ones you miss come back on a spaced schedule, and a plan built from your exam date.