Oklahoma Life Producer Practice Exam 2026 – All-in-One Resource to Master Your Certification

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What does "cash value" in a whole life policy refer to?

The tax-free death benefit amount

The amount available for policy loans

The component that grows over time and can be accessed

In a whole life policy, "cash value" refers to the savings component that accumulates over time as you pay premiums. This cash value grows at a guaranteed rate and can be accessed by the policyholder through loans or withdrawals. This aspect of a whole life policy makes it distinct from term life insurance, which does not have a cash value component. The cash value can also be used to pay premiums or be surrendered for cash if the policy is canceled.

While policy loans and actual cash payouts upon cancellation are related concepts, the overriding definition of "cash value" encompasses the savings aspect that grows and is available for use. The option highlighting the growth of the cash value best captures its purpose within a whole life policy, as it points to both the accumulation over time and the ability to access those funds.

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The actual cash payout upon policy cancellation

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