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.

Which of the following statements is true regarding Whole Life insurance?

It provides coverage for a specified term only
It accumulates cash value over time
It does not offer a death benefit
It is only available in fixed amounts

The correct answer is: It accumulates cash value over time

Whole Life insurance is designed to provide lifelong coverage, meaning it does not expire after a specified term as term life insurance does. One of the key features of Whole Life insurance is that it accumulates cash value over time. This cash value grows at a guaranteed rate and is an integral part of Whole Life policies. Policyholders can borrow against this cash value or even withdraw funds, providing financial flexibility and benefits that can be utilized during the policyholder’s lifetime. The other statements reflect misunderstandings of Whole Life insurance. For example, while it provides a death benefit, it is not limited to coverage for a specified term, nor is it available only in fixed amounts as it can vary based on the policyholder’s needs and choices.