New York Child Abuse Identification and Reporting Practice Exam

What are the three common types of permanent individual life insurance?

1. Term Life, Whole Life, Variable Life

2. Fixed Life, Universal Life, Renewable Life

3. Variable Life, Whole Life, Universal Life

4. Accidental Death, Whole Life, Term Life

The correct answer is: Variable Life, Whole Life, Universal Life

The three common types of permanent individual life insurance are indeed Variable Life, Whole Life, and Universal Life. These types of insurance are designed to provide coverage for the policyholder's entire life, as long as the premiums are paid. Whole Life Insurance offers a fixed premium and guarantees a death benefit along with a cash value that grows at a predetermined rate over time. This predictability makes it appealing to those looking for long-term financial planning. Universal Life Insurance is more flexible, allowing policyholders to adjust their premiums and death benefit amounts to better suit their financial needs. This type of insurance also accumulates cash value, but the growth can vary based on the performance of underlying investment options, which adds a layer of investment potential. Variable Life Insurance differs in that it offers a death benefit and cash value that can fluctuate based on the performance of investments chosen by the policyholder. This can potentially lead to higher returns, but also introduces more risk. In contrast, options like Term Life Insurance provide coverage for a specific period rather than permanently, while choices like Accidental Death are not categories of permanent life insurance. Thus, the three types listed in the correct answer represent the permanent solutions that allow for lifelong coverage and investment growth.