Question

An insurance product characterized by whole life coverage as long as the premiums are paid in any dollar amount. It offers both a death benefit and living benefits. It is not regulated by FINRA. What is this policy called?

Answer 1

Cash-value (whole) life insurance provides whole life coverage with both a death benefit and living benefits, including an accumulated cash value account usable by the policyholder. It is not regulated by FINRA.

Step-by-step explanation:

The insurance policy being described is known as cash-value (whole) life insurance. This type of insurance is unique in that it provides whole life coverage as long as the premiums are paid, and it is characterized by its two components: a death benefit and living benefits. The cash value component is an accumulation of funds that can be used by the policyholder while they are alive, functioning like a savings account within the policy. It is important to note that cash-value life insurance products are not regulated by the Financial Industry Regulatory Authority (FINRA), distinguishing them from investment products that are.

The insurance policy being described is indeed cash-value (whole) life insurance. This type of insurance offers coverage for the entire life of the policyholder as long as premiums are paid and is distinctive for its dual components: a death benefit and living benefits. The cash value component serves as an accumulation of funds that policyholders can utilize during their lifetime, operating akin to a savings account within the policy. It's crucial to highlight that cash-value life insurance products fall outside the regulatory purview of the Financial Industry Regulatory Authority (FINRA). This sets them apart from investment products that undergo regulation by FINRA, emphasizing the unique characteristics and features of cash-value life insurance as both a protection and savings instrument.

Answer 2

The insurance policy in question is known as cash-value (whole) life insurance. It offers lifelong coverage with both a death benefit and a living benefit in the form of cash value accumulation. This policy type is regulated by state insurance commissions instead of FINRA.

Step-by-step explanation:

The type of insurance policy described by the student is known as cash-value (whole) life insurance. This insurance product guarantees whole-life coverage as long as the premiums are paid and is characterized by its unique feature of providing both a death benefit and a living benefit in the form of a cash value accumulation. The cash value can be used during the policyholder’s lifetime under certain conditions, providing an additional layer of financial security.

Importantly, this type of policy is not overseen by the Financial Industry Regulatory Authority (FINRA), which sets it apart from other financial products that do offer investment features, such as variable life or variable universal life insurance policies. Instead, it is primarily regulated at the state level by insurance commissions. As a type of social insurance, it is similar to social security in that it requires regular payments in exchange for long-term benefits; however, unlike social security, the benefits of whole life insurance, including the cash value account, are specifically designated to the policyholder or their beneficiaries.