73. The type of policy where 80% to 90% of the premium is placed in traditional fixed income securities and the remainder is placed in contracts tied to a stipulated stock index is:
Answer: A
The type of policy is Equity index whole life.
Equity index whole life policies allocate 80% to 90% of the premium into traditional fixed income securities, while the remaining portion is invested in contracts linked to a specified stock index, providing a combination of stability and growth potential.
A) Equity index whole life
This option is correct because it accurately describes the policy type that invests a significant percentage of premiums in fixed income securities and utilizes a portion for equity index contracts, aligning with the question's criteria.
B) Current assumption whole life
This option is incorrect as current assumption whole life policies typically offer flexible premiums and death benefits based on current interest rates and mortality assumptions, without the specific allocation to equity index contracts mentioned in the question.
C) Variable life
Variable life policies are also incorrect because they allow policyholders to allocate their premiums among various investment options, including stocks and bonds, but do not have the fixed income and equity index structure outlined in the question.
D) Single premium whole life
This option is incorrect since single premium whole life insurance involves a one-time premium payment for permanent coverage, without the dual investment strategy of fixed income securities and equity index contracts specified in the question.
Conclusion
Equity index whole life is definitively the correct answer as it fits the description provided in the question regarding the investment strategy of the policy. All other options fail to meet the specific criteria of combining traditional fixed income investments with equity index contracts.