Xcel Life Policies Practice Exam

Reggie has a policy that features a face amount that increases over time and also includes a cash value component. This is characteristic of universal life insurance. Universal life policies provide flexible premiums and an adjustable death benefit, allowing the policyholder to increase the face amount of the insurance as financial needs change. The cash value grows based on interest rates set by the insurer, which typically allows for potential growth over the years.

In contrast, adjustable life insurance allows policyholders to adjust the death benefit and premium payments but does not inherently feature a guaranteed increasing face amount tied to a cash value in the same way universal life does. Modified life insurance has a premium structure that starts lower and increases later but does not have the same flexibility as universal life. Credit life insurance is designed primarily to cover a specific loan amount and does not accumulate cash value; it provides a death benefit specifically tied to outstanding debts.

Reggie’s policy, with its increasing face amount and substantial cash value after years of accumulation, clearly aligns with the attributes of universal life insurance.