Asked by Khyla Singleton on Jun 04, 2024
Verified
Which one of the following is a life insurance policy that will provide a fixed death benefit and allows the policyholder to choose where to invest the policy's cash value?
A) term life
B) whole life
C) variable life
D) industrial life
Variable Life
A form of permanent life insurance where the cash value and death benefit can vary based on the performance of investments chosen by the policyholder.
Cash Value
The amount available in cash upon the cancellation of an insurance policy before it becomes payable upon death or maturity.
- Grasp the principles underlying different types of life insurance policies and their investment components.
Verified Answer
CC
Camryn CalderJun 10, 2024
Final Answer :
C
Explanation :
Variable life insurance allows the policyholder to invest the policy's cash value in various investment options, such as stocks, bonds, and mutual funds. The death benefit is fixed, but the cash value can potentially grow depending on the performance of the chosen investments. Term life insurance only provides coverage for a specified period and does not accumulate any cash value. Whole life insurance provides a fixed death benefit and invests the policy's cash value in low-risk options, but the policyholder does not have control over the investments. Industrial life insurance is a type of whole life insurance that provides small death benefits and is typically sold to lower-income individuals.
Learning Objectives
- Grasp the principles underlying different types of life insurance policies and their investment components.
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