Texas Life Agent Practice Exam

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Prepare for the Texas Life Agent Exam. Study with flashcards and multiple-choice questions, each with hints and explanations. Get ready for your career as a licensed life insurance agent in Texas!

Practice this question and more.

What type of life insurance policy should a business owner with a fluctuating income consider?

Term Life
Adjustable Life
Whole Life
Universal Life

The correct answer is: Adjustable Life

The best choice for a business owner with a fluctuating income is an adjustable life insurance policy. This type of policy offers the flexibility needed to adapt premium payments and death benefits based on the financial situation of the policyholder. For a business owner, income can vary significantly from month to month or seasonally, which may affect their ability to pay premiums consistently. Adjustable life insurance allows the policyholder to lower premiums during leaner times and potentially increase them when their cash flow improves. This flexibility can provide the essential life insurance coverage while accommodating the unpredictable nature of business finances. Additionally, adjustable life insurance combines the features of both term and whole life insurance, offering a death benefit along with a cash value component. The policyholder can also adjust the death benefit as their needs change over time. This adaptability makes adjustable life particularly well-suited for individuals like business owners, who may require more control over their insurance policy as their financial situations evolve.