Tennessee Insurance Practice Exam

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Study for the Tennessee Insurance Exam. Prepare with a database of questions and flashcards, each offering hints and detailed explanations. Ace your exam confidently!

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Which life policy combines investment choices with a form of Term coverage?

Variable Life
Universal Life
Term Life
Whole Life

The correct answer is: Universal Life

The life policy that combines investment choices with a form of term coverage is Universal Life insurance. This type of policy offers flexibility in premium payments and allows the policyholder to allocate a portion of the premium towards a cash value component, which can then be invested in various options selected by the policyholder. Universal Life provides a death benefit similar to term insurance but also has a savings or investment component that can grow over time. In contrast, Variable Life insurance is primarily focused on investment performance, with the death benefit and cash value both fluctuating based on the performance of the underlying investments. Term Life insurance typically provides only a death benefit for a specified term without any investment component or cash value. Whole Life insurance offers a guaranteed death benefit and fixed premiums, but it doesn't provide the same level of investment flexibility as Universal Life.