Certified Financial Consultant (CFC) Practice Exam

Which type of insurance policy provides coverage for children as beneficiaries?

1. Term life.

2. Whole life.

3. Juvenile life.

4. Universal life.

The correct answer is: Juvenile life.

Juvenile life insurance is specifically designed to provide coverage for minors, meaning that the insured person is a child. This type of policy typically names the child as the insured while allowing parents or guardians to act as the policyholders. One key feature is that it generally accumulates cash value over time, and it can also provide future insurability options for the child as they grow up, allowing them to convert to a standard life insurance policy without needing a medical exam later. Other types of life insurance, like term life, whole life, and universal life, do not specifically cater to children as beneficiaries in the same way juvenile life does. While these policies can insure individuals of any age, they are structured primarily for adults and focus on providing financial protection for the family or individuals benefiting from the policy. Juvenile life insurance stands out because it directly addresses the need for coverage that benefits a child from an early age, securing them financially in the future while also providing the parents or guardians peace of mind.