Washington Life Producer Practice Exam

Which of the following is NOT a valid option for an Adjustable Life Policy?

1. A nonforfeiture option can be used to increase the death benefit

2. Change premium payment frequency

3. Adjust death benefits

4. Change the cash value

The correct answer is: A nonforfeiture option can be used to increase the death benefit

An Adjustable Life Policy is designed to offer flexibility in premium payments, death benefits, and cash value accumulation. The primary features allow policyholders to adjust these elements based on their evolving financial needs and circumstances. The statement about a nonforfeiture option being used to increase the death benefit is not valid in the context of Adjustable Life policies. Nonforfeiture options refer to alternatives available to policyholders when they decide to stop paying premiums. These options typically allow the policyholder to receive benefits such as cash value or reduced paid-up insurance but do not extend to increasing the death benefit itself. Instead, they provide ways to preserve some form of coverage or accumulated value when the policy lapses or is surrendered. Conversely, changing the premium payment frequency, adjusting the death benefits, and potentially impacting the cash value are all valid actions associated with Adjustable Life Insurance policies. They embody the very essence of what makes these policies adjustable and adaptive to the policyholder's goals and financial situation.