Which of the following would normally be suitable for a prospective policyowner interested in the guaranteed death benefits but eager for increased cash value accumulation?

Question

1. Ordinary whole life insurance
2. Fixed-premium variable life insurance
3. Declared-rate universal life insurance
4. Limited-payment life insurance

Answer 1

For a prospective policyowner interested in guaranteed death benefits while also eager for increased cash value accumulation, Fixed-premium variable life insurance (option 2) would typically be the most suitable choice.

Here's a brief overview of the options:

1. Ordinary Whole Life Insurance: Provides guaranteed death benefits and cash value accumulation, but the cash value growth is usually slower compared to variable life.

2. Fixed-premium Variable Life Insurance: Offers a guaranteed death benefit along with the potential for increased cash value through investment choices in various subaccounts. This allows for more aggressive growth depending on market performance.

3. Declared-rate Universal Life Insurance: Offers guaranteed death benefits with a declared interest rate for cash value, but the growth of cash value is usually less aggressive compared to variable life.

4. Limited-payment Life Insurance: Also provides guaranteed death benefits and accumulates cash value over time, but is designed for a limited payment period which may not maximize cash value growth.

Thus, for someone looking for both death benefits and a good chance at increased cash value, fixed-premium variable life insurance is the most appropriate option.