Oklahoma Life Producer Practice Exam

In a Variable Whole Life policy, which aspect is guaranteed?

1. The cash value growth

2. The premium and period of protection

3. The investment decisions made by the policyholder

4. The total return on investment

The correct answer is: The premium and period of protection

In a Variable Whole Life policy, the aspect that is guaranteed is the premium and the period of protection. This means that the policyholder will have a fixed premium that they must pay, and they will be assured coverage for the duration of the policy, as long as they continue to pay those premiums. Variable Whole Life insurance combines features of both whole life and variable life policies, providing a flexibility aspect regarding cash value and death benefits that can fluctuate with the performance of underlying investments. However, the guarantee of the premium payment and the coverage period remains a significant and distinctive feature of this type of policy, offering policyholders a level of stability amidst the investment-related risks associated with the variability of the cash value and death benefit. This guarantee distinguishes the product from other types of life insurance that may not offer fixed premiums or a guaranteed period of protection. It provides the holder with assurance that, irrespective of market fluctuations, their premiums will remain consistent, and they will retain their insurance coverage.