Oklahoma Life Producer Practice Exam

Which insurance types are commonly classified as permanent individual life insurance?

1. Limited, Continuous, Whole

2. Whole, Universal, Variable

3. Term, Graded, Whole

4. Universal, Indexed, Term

The correct answer is: Whole, Universal, Variable

The classification of permanent individual life insurance primarily includes Whole, Universal, and Variable life insurance policies. These types of insurance are designed to provide coverage for the insured's entire life, as long as premiums are paid, and they typically include a cash value component that can grow over time. Whole life insurance provides a fixed premium and guaranteed cash value accumulation and death benefit. Universal life insurance offers more flexibility in terms of premium payments and death benefits, allowing policyholders to adjust their coverage as needed. Variable life insurance allows the cash value and death benefit to fluctuate based on the investment performance of selected sub-accounts, offering the potential for growth but also increasing risk. In contrast, options such as Term insurance are intended for temporary coverage and do not build cash value, making them distinct from permanent life insurance products. Graded and Indexed insurance products have their own specific criteria and structures that set them apart from standard definitions of permanent life insurance. By recognizing these characteristics, it’s clear that B accurately represents the types of permanent individual life insurance policies.