New Jersey Life Producer Practice Exam

In variable life insurance, policyholders directly influence the growth of their cash value by allocating their cash value among different investment options offered by the insurance company. This type of policy allows the cash value to be invested in various investment vehicles, such as stocks, bonds, or mutual funds, which can perform differently based on market conditions.

When policyholders select investments, they take on more control over the potential growth of their cash value compared to traditional life insurance products, which often have a fixed growth rate. Therefore, the success of the cash value is highly dependent on the choices made by the policyholder regarding these investment allocations. If the selected investments perform well, the cash value grows significantly; if they do poorly, the growth may be minimal or nonexistent.

The other options, while relevant in different contexts, do not directly influence the cash value growth in the same way as investment allocation does. Choosing the insurance premium amount affects the overall policy but does not dictate how the cash value grows. Changing named beneficiaries or extending the coverage period impacts policy terms but not the cash value's investment performance or growth trajectory.