AD Banker Comprehensive Practice Exam

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Enhance your exam readiness with the AD Banker Comprehensive Exam guide. Includes flashcards and multiple-choice questions with explanations.

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Which product is designed to distribute savings periodically over an individual's life?

Universal Life Insurance
Annuities
Participating Whole Life
Variable Life Insurance

The correct answer is: Annuities

Annuities are financial products specifically designed to provide a systematic distribution of savings or investment gains over a person’s lifetime. They serve as a reliable source of income, often used for retirement purposes, allowing individuals to convert a lump sum of money into a stream of income for a set period or for the rest of their life. This periodic distribution can be adjusted based on the terms of the annuity, including whether the payments are immediate or deferred. In contrast, options like universal life insurance, participating whole life insurance, and variable life insurance primarily focus on providing a death benefit or growth of cash value, rather than a scheduled income distribution during an individual's life. While these insurance products can accumulate cash value over time, their primary purpose is not to provide systematic withdrawals or periodic income; rather, they are designed to provide financial protection against mortality risks and potential investment growth. Thus, the unique characteristic of annuities that allows for periodic, structured distribution of savings distinctly positions them as the correct answer in this context.