District Of Columbia Insurance Producer License Exam

What is the primary purpose of the 'separate account' in a variable life insurance policy?

To hold premium reserves for the insurer's general obligations To hold and invest the policyholder's premium in market-based subaccounts, insulated from the insurer's general liabilities To fund the insurer's reinsurance obligations To maintain the DC Insurance Guaranty Association's reserve fund

Correct Answer:

To hold and invest the policyholder's premium in market-based subaccounts, insulated from the insurer's general liabilities

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