Massachusetts Life Producer Practice Exam

Which of these typically increases as the insured ages in a whole life insurance policy?

1. The premium payments

2. The cash value

3. The death benefit

4. The policy length

The correct answer is: The premium payments

In a whole life insurance policy, the cash value typically increases as the insured ages. This is because whole life policies are designed to accumulate cash value over time, and this growth is generally based on a combination of premium payments and the insurer's investment performance. As the insured gets older, the cash value builds further, providing a savings component alongside the insurance coverage. The death benefit remains level for whole life policies after the initial policy is issued, which means it does not typically increase with age. While some policies may offer riders to increase the death benefit, this is not the standard for whole life insurance. The length of the policy generally remains constant, as whole life policies are designed to last for the lifetime of the insured, provided premiums are paid. Premium payments for whole life insurance are level and fixed for the life of the policy, meaning they do not increase as the insured ages. Thus, the correct choice is that the cash value increases as the insured ages, as it is designed to accumulate over time, reflecting the predictable growth of the policy's cash value component.