South Carolina Life Insurance Practice Exam

When does an adjustable life policy typically start to accumulate cash value?

1. At the end of the first year

2. Age 65

3. Age 100

4. Immediately upon purchase

The correct answer is: Age 100

An adjustable life policy typically starts to accumulate cash value immediately upon purchase. This type of life insurance combines elements of term and whole life insurance, allowing the policyholder to adjust the premium and death benefit amounts. A portion of the premium payments contributes to the cash value, which begins to grow from the moment the policy is in force. While certain variations of life insurance may have different cash value accumulation schedules, adjustable life policies are designed to provide flexibility and immediate benefits, including cash value accumulation. In contrast, the other mentioned ages or timeframes would not generally apply, as they do not pertain to the specific operations of cash value accumulation in adjustable life insurance.