Oklahoma Life Producer Practice Exam

What insurance feature allows for investment in a separate account?

1. Term Life Feature

2. Universal Account Feature

3. Variable Whole Feature

4. Standard Life Feature

The correct answer is: Variable Whole Feature

The correct answer pertains to the variable whole life insurance product, which allows policyholders to allocate a portion of their premium payments into separate investment accounts. This design enables individuals to invest in various options, such as stocks and bonds, which can potentially increase the cash value of the insurance policy over time. The performance of these investments directly impacts the cash value and possibly the death benefit, providing an opportunity for growth based on market conditions. In contrast, the other choices do not offer this investment flexibility. For example, a term life feature typically provides only death benefit protection for a specified term without any investment component. The universal account feature allows for flexibility in premium payments and death benefits but does not involve separate investment accounts that the policyholder can manage. The standard life feature generally refers to whole life insurance policies that provide guaranteed coverage and build cash value at a fixed, predetermined rate, without offering investment choices tied to market performance.