Massachusetts Life Producer Practice Exam

Which statement concerning adjustable life insurance is accurate?

1. The face amount and premiums can be changed simultaneously by the policyowner.

2. Only the premiums can be adjusted.

3. The face amount remains constant throughout the policy term.

4. It has no cash value.

The correct answer is: The face amount and premiums can be changed simultaneously by the policyowner.

Adjustable life insurance is designed to offer flexibility to policyholders by allowing them to modify both the face amount and the premium of the policy. This feature is particularly advantageous for individuals whose financial situations or insurance needs may change over time. By allowing the policyowner to adjust both components, adjustable life insurance can cater to evolving circumstances, such as changes in income, family size, or financial obligations. While other aspects of this type of insurance may include cash value accumulation over time, the key characteristic that distinguishes adjustable life insurance is the ability of the policyholder to change both the insured amount and premium payments as needed. This flexibility makes it an attractive option for those who want more control over their life insurance coverage.