Question

In whole life insurance when is the policy cash value scheduled to equal the face amount? A) At the insured's age 100. B) By the policy's 10th year. C) When the insured paid up all policy loans. D) It depends on the type of whole life purchased.

Answer 1

The policy cash value in whole life insurance is scheduled to equal the face amount D) depending on the type of whole life purchased.

Step-by-step explanation:

In whole life insurance, the policy cash value is scheduled to equal the face amount as It depends on the type of whole life purchased. There are different types of whole life insurance policies available, such as traditional whole life, variable life, and universal life. The specific terms and conditions of each policy will determine when the cash value equals the face amount.

As the policyholder pays premiums, a portion of the payment goes towards the cost of insurance coverage, while the remainder goes into a cash value account. This cash value grows on a tax-deferred basis and can be accessed by the policyholder through withdrawals or loans.