New York Insurance Exam Practice Question
Which of the following is a feature of a variable life insurance policy?
Correct Answer: B
Rationale: A variable life insurance policy allows policyholders to allocate a portion of their premiums into various investment options, meaning they assume the investment risk. This can lead to fluctuating cash values and death benefits based on market performance.
Option A is incorrect as variable life policies do not guarantee cash value; it can vary with investment performance. Option C is also wrong since premiums can be flexible rather than fixed. Option D is misleading; variable life policies always include a death benefit, which may vary in amount. Thus, the investment risk is a defining feature of this type of policy.
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