5.1 Life Insurance Products
Life insurance products protect against premature mortality risk. Variable life products are dual-regulated as both insurance contracts and securities under state and federal law.
Key NASAA Exam Takeaways
- Term Life provides pure death protection for a specified period with no cash value accumulation.
- Whole Life provides permanent death protection, level premiums, and guaranteed cash value in the general account.
- Variable Life allows policyholders to allocate premiums to subaccounts (separate account); it carries investment risk and is regulated as a security.
- Life insurance death benefits are generally received by beneficiaries income-tax-free.
Knowledge Checkpoint • Section 5.1
Which of the following life insurance policies is classified as a security and requires delivery of a prospectus prior to or at the time of solicitation?