Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Life InsuranceEasy
A client, aged 50, is looking for a life insurance policy that provides a guaranteed death benefit for their entire life, accumulates cash value that can be accessed, and has fixed premiums. Which type of policy best fits these needs?
- AAnnual Renewable Term
- BDecreasing Term Life
- CVariable Universal Life
- DWhole Life
Show answer & explanationAnswer & explanation
Correct answer: D. Whole Life
Whole Life insurance provides a guaranteed death benefit, builds cash value, and has fixed premiums, matching all the client's requirements.
Why the other options are wrong
- A. Annual Renewable Term policies have increasing premiums and no cash value.
- B. Decreasing Term Life has no cash value and a decreasing death benefit.
- C. Variable Universal Life offers flexible premiums and death benefits, but the cash value is not guaranteed and can fluctuate with market performance.
Whole Life Insurance
A type of permanent life insurance that provides a guaranteed death benefit, level premiums, and builds cash value over the policy's life.
- Guaranteed death benefit
- Guaranteed cash value growth
- Fixed premiums for life
- Policy duration is for the insured's entire life
Memory trick: Permanent life is like a tree, always growing cash value, always there.