Oklahoma Life Producer Practice Exam

Which feature is NOT characteristic of an adjustable life policy?

1. Flexible premium payments

2. Adjustable coverage amount

3. Fixed term duration

4. Multiple policy plans

The correct answer is: Fixed term duration

An adjustable life insurance policy is designed to provide a high level of flexibility to the policyholder. One of the core characteristics of this type of policy is its adjustable nature, which allows for changes in premium payments and the coverage amount based on the policyholder's needs over time. This adaptability is integral to adjustable life insurance, making it an attractive option for many individuals. The option about fixed term duration is not characteristic of adjustable life policies. These policies do not have a fixed term duration like term life insurance, which provides coverage for a specified period (e.g., 10, 20, or 30 years). Instead, adjustable life policies can combine features of both term and whole life insurance, allowing for a lifetime of coverage as long as premiums are maintained. By offering flexible premium payments and an adjustable coverage amount, adjustable life policies cater to changing financial situations and insurance needs. Additionally, having multiple policy plans allows individuals to tailor their coverage more effectively, further emphasizing the malleable nature of adjustable life insurance. In summary, the defining trait of adjustable life policies is their flexibility, which contrasts with a fixed term duration, making that option not characteristic of this type of insurance.