California Insurance License Exam Practice Test Practice Question
The amount that accumulates in a life insurance policy is called
Correct Answer: C
Rationale: The amount that accumulates in a life insurance policy is known as cash value. This represents the savings component of permanent life insurance, where a portion of the premium payments builds up over time.
Option A, loan value, refers to the amount a policyholder can borrow against the cash value, not the accumulated amount itself.
Option B, face value, is the death benefit payable to beneficiaries upon the policyholder's death, rather than the accumulated savings.
Option D, surrender value, is the amount a policyholder would receive if they cancel the policy, which may be less than the total cash value due to fees or penalties.
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