Utah Life Producer Practice Exam

Question: 1 / 400

What is one benefit of having cash value in a permanent life insurance policy?

It guarantees higher interest rates than savings accounts

It can be borrowed against

Having cash value in a permanent life insurance policy provides the significant benefit of being able to borrow against it. This feature allows policyholders to access funds without having to surrender the policy or incur tax penalties, as long as the loan is repaid. This aspect of cash value is particularly advantageous because it can serve as a source of emergency funds or a way to finance major expenses, while still keeping the life insurance coverage in force.

The ability to borrow against the cash value also means that policyholders can potentially enjoy liquidity and financial flexibility that isn't typically available in term life insurance policies, which do not accumulate cash value at all. This can be a strategic financial tool for individuals looking to manage their finances while ensuring their loved ones are protected should something happen to them.

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It decreases the premium amount

It has no impact on premiums

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