Tennessee Insurance Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

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

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which of the following best describes the cash value feature of a Whole Life policy?

Variable and unpredictable
Consistent and guaranteed over time
Non-existent
Only applicable during the policy's first year

The correct answer is: Consistent and guaranteed over time

The cash value feature of a Whole Life insurance policy is best described as consistent and guaranteed over time. Whole Life insurance is designed to provide a death benefit and also accumulate cash value at a steady and predictable rate. The insurance company guarantees that the cash value will grow each year, typically at a specified interest rate, ensuring that policyholders can rely on this accumulation for future financial needs, such as loans or withdrawing funds. This consistency is a fundamental characteristic of Whole Life policies, making them a popular choice for individuals seeking both insurance protection and a savings or investment component. The cash value builds up over the life of the policy and is accessible while the policyholder is alive, which adds to the financial stability and predictability offered by Whole Life insurance.