New Jersey Life Producer Practice Exam 2026 – Complete Study Resource

The correct answer is variable life insurance. This policy is characterized by its unique structure that combines life insurance coverage with an investment component. Unlike whole life or term life insurance, which have fixed premiums and benefits, variable life insurance allows the policyholder to select how the cash values are invested, typically in a variety of separate accounts that may include stocks, bonds, or money market funds. This investment flexibility can lead to varying cash values and death benefits, depending on the performance of the chosen investment options.

Additionally, variable life insurance features flexible premiums, meaning the policyholder can adjust the amount and timing of premium payments within specified limits. Thus, this type of policy appeals to those who are looking for both insurance coverage and the opportunity for investment growth, aligning well with the needs of individuals who wish to take an active role in managing their financial assets.