Types of Policies
What immediate cash feature distinguishes a single-premium whole life policy from an ordinary whole life policy?
Answer and explanation
Answer: A. Single-premium whole life is fully paid up immediately, creating an immediate cash value from inception.Source: NAIC Life Insurance Guide — PDF page 4, Single Premium Life
More types of policies questions
- A universal life policy’s cash value is no longer sufficient to cover current insurance costs, and the owner makes no additional payment. What is the principal policy risk?
- A variable universal life owner pays only minimal premiums while the selected separate-account options lose value. Monthly cost-of-insurance and expense deductions continue. What is the main near-term risk if the owner makes no change?
- A variable universal life policy keeps the same stated premium plan and mortality charge schedule, but the owner's selected stock subaccount falls sharply. Which policy element is directly changed first by that investment performance and can later affect whether charges can be paid?
- A variable whole life owner reallocates policy value among available stock and bond choices. Which account description should the producer use?
- A worker buys an annuity at age 45 and plans to begin income at age 65 after years of tax-deferred accumulation. Which classification best fits?
- An annual renewable term policy keeps the same death benefit for each one-year term. What normally happens to its premium from year to year?
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