South Carolina Life Insurance Practice Exam

What is required from an agent to sell variable life insurance policies?

1. SEC Registration

2. State-specific insurance license

3. Completion of a training program

4. Affiliation with a life insurance carrier

The correct answer is: SEC Registration

To sell variable life insurance policies, agents are required to obtain registration with the Securities and Exchange Commission (SEC). This requirement stems from the fact that variable life insurance policies are considered securities due to their investment component, where the cash value and death benefit can fluctuate based on the performance of the investments chosen by the policyholder. Agents must demonstrate a thorough understanding of both the insurance and securities aspects of these products. Thus, in addition to being licensed to sell life insurance in their respective states, agents must also pass specific securities exams, such as the Series 6 or Series 7, to achieve that SEC registration. This dual requirement ensures that agents have the necessary knowledge and legal authority to represent and sell products that can be complex and carry investment risk, thereby protecting consumers and maintaining regulatory standards.