Tennessee Insurance Practice Exam

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Prepare for the Tennessee Insurance Exam with engaging quizzes featuring detailed flashcards, multiple-choice questions, hints, and explanations, ensuring readiness for test day.

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Which type of policy generally offers flexible premium payments?

Term life insurance
Whole life insurance
Variable life insurance
Universal life insurance

The correct answer is: Universal life insurance

Universal life insurance is designed to provide flexible premium payments, allowing policyholders the ability to adjust their premium amounts within certain limits. This flexibility means that the policyholder can choose to pay more or less than the planned premium depending on their financial situation. Additionally, any premiums paid above the minimum requirement can contribute to the cash value of the policy, which earns interest over time. This adaptability can be particularly beneficial for individuals whose financial circumstances may vary from year to year, as they can manage their investment in the policy according to their needs without the rigidity often found in other types of life insurance. Whole life insurance, for example, has fixed premiums and a set coverage amount, while term life insurance provides coverage for a specified period without building cash value, and variable life insurance ties cash value growth to investment choices, often with less premium flexibility than universal life.