Question 79

Cash value provisions are typically found in all life insurance policies EXCEPT decreasing term life.

Cash value provisions are features of permanent life insurance policies, which allow policyholders to accumulate savings over time. Decreasing term life insurance, however, does not build cash value, as it is designed to provide a death benefit that decreases over the term of the policy.

A) universal life

Universal life insurance includes cash value provisions, allowing policyholders to earn interest on the cash value component while maintaining flexibility in premium payments and death benefits. This characteristic aligns with the nature of permanent life insurance.

B) adjustable life

Adjustable life insurance also contains cash value provisions, providing policyholders with the ability to adjust their premium payments and death benefits while accumulating cash value over time. This option is consistent with the features found in permanent life policies.

C) decreasing term life

Decreasing term life insurance does not include cash value provisions, as it is structured to provide a decreasing death benefit without any cash accumulation feature. This makes it the correct answer to the question, as it is the only option that does not offer cash value.

D) whole life

Whole life insurance is a type of permanent life insurance that includes cash value provisions. Policyholders can build cash value over time, which can be borrowed against or withdrawn, making it a staple feature of whole life policies.

Conclusion

Decreasing term life insurance is the only option that does not provide cash value provisions, as it is designed solely for providing a death benefit that decreases over time. In contrast, universal life, adjustable life, and whole life policies all offer cash accumulation features, which is a fundamental aspect of permanent life insurance. Thus, option C is definitively the correct answer.