Oklahoma Life Producer Practice Exam 2025 – All-in-One Resource to Master Your Certification

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What is the cash value of Variable whole life policies based on?

A fixed interest rate regardless of investments

The performance of the investment component

The cash value of Variable whole life policies is primarily determined by the performance of the investment component. Unlike traditional whole life insurance, which generally has a guaranteed cash value that grows at a fixed rate, Variable whole life policies allow policyholders to allocate their premiums among a variety of investment options, such as stocks, bonds, or mutual funds.

As the value of the underlying investments fluctuates with market performance, so does the cash value of the policy. This means that the cash value can increase or decrease based on how well these investments perform over time, providing the potential for greater growth but also introducing more risk compared to fixed-rate policies. This is a fundamental characteristic of Variable whole life insurance, making it unique and emphasizing its link to investment performance.

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Market fluctuations without guaranteed minimums

The age of the policyholder at inception

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