Which policy is a form of permanent life insurance with a cash value that can be tied to a market index?

Which policy is a form of permanent life insurance with a cash value that can be tied to a market index?

• A. Term Life Insurance
• B. Group Life Insurance
• C. Indexed Whole Life
• D. Variable Life Insurance

Answer: (C)

This question focuses on permanent life insurance that builds cash value tied to a market index. Indexed whole life fits this description because it provides lifelong coverage while the cash value grows based on the performance of a market index. The policy typically guarantees a minimum credited rate and places a cap on upside, so you can participate in market gains without directly investing in securities. Term life has no cash value and ends after a set term. Group life is usually employer-provided and not designed to be indexed. Variable life does involve cash value, but its growth comes from investing in separate accounts with direct market risk and typically no guaranteed minimum rate. So, the option that matches a permanent policy with cash value linked to an index is indexed whole life.

This question focuses on permanent life insurance that builds cash value tied to a market index. Indexed whole life fits this description because it provides lifelong coverage while the cash value grows based on the performance of a market index. The policy typically guarantees a minimum credited rate and places a cap on upside, so you can participate in market gains without directly investing in securities.

Term life has no cash value and ends after a set term. Group life is usually employer-provided and not designed to be indexed. Variable life does involve cash value, but its growth comes from investing in separate accounts with direct market risk and typically no guaranteed minimum rate. So, the option that matches a permanent policy with cash value linked to an index is indexed whole life.