Massachusetts State Life Insurance Practice Exam

Disable ads (and more) with a membership for a one time $4.99 payment

Study for the Massachusetts State Life Insurance Exam. Use our flashcards and multiple choice questions, each with hints and explanations. Prepare confidently for your test!

Practice this question and more.


What key feature distinguishes universal life insurance from whole life insurance?

  1. Fixed premiums

  2. Unlimited death benefits

  3. Flexible premiums and benefits

  4. Guaranteed cash value growth

The correct answer is: Flexible premiums and benefits

Universal life insurance is characterized by its flexible premiums and benefits, which sets it apart from whole life insurance. In universal life policies, policyholders have the ability to adjust their premium payments and vary the amount of death benefit coverage, providing a level of adaptability to meet changing financial needs and goals. This flexibility allows policyholders to pay more than the minimum premium when they have extra funds available, which can boost the cash value of the policy. Conversely, if they face financial difficulties, they have the option to reduce or skip premium payments as long as there is enough cash value to cover the cost of insurance. Whole life insurance, in contrast, typically requires fixed premium payments throughout the life of the policy, and the death benefit remains constant unless adjusted through additional paid premiums or riders. Thus, the defining feature of universal life insurance lies in its adaptability in both premium payments and death benefit design, allowing for a more personalized approach to life insurance coverage.