New York Insurance Exam Practice Question
Which of the following is a feature of universal life insurance?
Correct Answer: B
Rationale: Universal life insurance is characterized by its flexible premium payments, allowing policyholders to adjust their contributions based on financial circumstances. This adaptability is a key feature that distinguishes it from other types of life insurance.
Option A, fixed death benefit, is incorrect as universal life policies typically offer adjustable death benefits. Option C, no cash value, is misleading; universal life does build cash value over time, unlike term insurance. Option D, guaranteed returns, is also inaccurate; while there may be a minimum interest rate, returns can fluctuate based on market performance. Thus, flexibility in premiums is the defining feature of universal life insurance.
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