Colorado Life Producer License Practice Test

What is a key benefit of interest sensitive whole life insurance?

1. The premiums are lower than term life

2. It guarantees a benefit until a specific age

3. It offers fixed investment returns

4. It provides fully flexible premiums

The correct answer is: It guarantees a benefit until a specific age

The key benefit of interest sensitive whole life insurance is that it guarantees a benefit until a specified age, typically until the insured passes away. This type of policy provides not only a death benefit but also accumulates cash value over time, which is sensitive to interest rates. Unlike term life insurance, which only provides coverage for a limited duration and does not build cash value, interest sensitive whole life policies offer a permanent solution for life insurance needs. This feature ensures that beneficiaries will receive a payout regardless of when the insured dies, as long as the policy remains in force, making it a reliable financial planning tool. Other options like lower premiums compared to term life, fixed investment returns, and fully flexible premiums do not accurately characterize the essential benefit of interest sensitive whole life insurance. The focus on guaranteed lifelong coverage highlights the policy's purpose in providing enduring financial security.