Which type of policy provides a minimum guaranteed death benefit?

• A. Variable Whole Life
• B. Fixed term life
• C. Universal Life
• D. Whole Life

Answer: (D)

A Whole Life policy guarantees a death benefit. It is a permanent policy with fixed premiums, and the insurer promises a level death benefit that is paid out upon death as long as premiums are paid. The cash value grows at a guaranteed rate, but the key feature here is the guaranteed minimum death benefit, which remains in force for the life of the policy.

In contrast, term life provides coverage for a set period with no cash value, universal life offers flexible premiums and death benefit options tied to the cash value, and variable whole life involve investment-based cash value and death benefit that can vary with market performance. Those features mean the death benefit isn’t guaranteed in the same fixed way as Whole Life.