Washington Life Producer Practice Exam

A policyowner may change two policy features on what type of life insurance?

1. Universal Life

2. Term Life

3. Adjustable Life

4. Permanent Life

The correct answer is: Adjustable Life

A policyowner may change two policy features on Adjustable Life insurance because this type of policy combines features of both term and whole life insurance, allowing for flexibility in premium payments and death benefits. In Adjustable Life insurance, the policyholder has the ability to adjust not only the premium payment amount but also the death benefit. This adaptability allows the insured to respond to changing financial situations or needs. For instance, if a policyholder's income decreases, they can lower their premium payments or, conversely, if their financial situation improves, they can increase both their premium and the death benefit. This differs from other types of insurance, such as Term Life, which provides coverage for a specified period and does not allow for changes in premiums or benefits once set. Universal Life, while flexible, typically allows policyowners to adjust either premiums or death benefits, but not both simultaneously with the same level of ease as Adjustable Life. Permanent Life broadly refers to whole life policies that provide fixed premiums and benefits without the same level of adjustability. Thus, the nature of Adjustable Life insurance makes it unique in allowing changes to both premium and death benefits in a straightforward manner.