SIE (Securities Industry Essentials) 2025 – 400 Free Practice Questions to Pass the Exam!

Question: 1 / 400

Which of the following investment risks is the greatest risk in a variable life insurance policy?

Interest rate risk

Market risk

Market risk is the greatest risk in a variable life insurance policy because it refers to the risk of losing money in the stock market. With a variable life insurance policy, the cash value is invested in stocks, bonds, and other investment vehicles, so if the market performs poorly, the policy's cash value can decrease. Interest rate risk (A) and credit risk (C) are also present in variable life insurance policies, but they are not as significant as market risk. Legislative risk (D) is not a common risk in variable life insurance policies.

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Credit risk

Legislative risk

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