Modified Whole Life is not considered interest sensitive. Which statement is true?

• A. True
• B. False
• C. Not specified
• D. Only in certain markets

Answer: (A)

Interest sensitivity in life insurance means the policy’s cash value and sometimes the death benefit are tied to current interest rates or credited rates that can move with the market. Modified Whole Life isn’t linked to those market rates. It’s a form of whole life with a specific premium structure and guaranteed cash value growth at a fixed, stated rate, independent of current interest rate fluctuations. Because of that fixed-rate growth and lack of rate-driven crediting, it isn’t considered interest sensitive. So the true statement is that Modified Whole Life is not considered interest sensitive.