Which of the following life insurance policies provides a 25-year-old with the most rapid growth of cash value?

Question

Certilyst · Accepted Answer

B Rationale: 20-Pay Life provides a 25-year-old with the most rapid growth of cash value. This policy is designed to accumulate cash value quickly over a 20-year payment period, allowing the insured to build significant savings in a relatively short time frame.

Straight Life policies typically take longer to build cash value because premiums are paid over the insured's entire life, resulting in slower cash value accumulation in the early years.

Life Paid-Up at Age 65 also offers cash value accumulation, but the payment period is longer than 20 years, causing it to grow at a slower rate compared to a 20-Pay Life policy.

Renewable Term to age 65 does not accumulate cash value at all; it only provides a death benefit during the term. Therefore, it is not suitable for those seeking rapid cash value growth.

Indiana Life and Health Producer License Exam

Which of the following life insurance policies provides a 25-year-old with the most rapid growth of cash value?