Arkansas Life and Health Insurance Practice Exam

Joe has a whole life policy with a guaranteed insurability rider. He was 21 at the time the policy was issued. If he exercises all of the options at the ages specified under the typical rider, how many policies will he end up with?

1. 5

2. 6

3. 7

4. 8

The correct answer is: 5

Joe, having purchased a whole life policy with a guaranteed insurability rider at the age of 21, is allowed to increase his coverage at specified ages without providing evidence of insurability. With the typical rider, Joe will be able to exercise his options at specific ages leading to multiple policies. The number of policies Joe will end up with can be calculated as follows: 1. Initial policy at age 21. 2. First increase at age 25 (4 years after the initial policy). 3. Second increase at age 29. 4. Third increase at age 33. 5. Fourth increase at age 37. 6. Fifth increase at age 41. Therefore, if Joe exercises all his options at the specified ages under the guaranteed insurability rider, he will end up with a total of 6 policies, hence option B is incorrect. Option C and D are also incorrect as they do not represent the correct number of policies Joe will end up with.