Life License Qualification Program (LLQP) Practice Exam

Which factor does NOT determine how much coverage can be purchased with dividends used for paid-up additions?

1. Type of life insurance

2. S's attained age

3. Dividend amount used toward purchase

4. Beneficiary's age

The correct answer is: S's attained age

The factor that does not determine how much coverage can be purchased with dividends used for paid-up additions is the beneficiary's age. The amount of coverage that can be acquired through the use of dividends for paid-up additions primarily relies on aspects related to the policyholder and policy itself, rather than the age of the beneficiary. Key factors include the type of life insurance in force, which affects the structure and potential benefits; the insured's attained age, which influences the cost of insurance and ultimately the value of the paid-up additions; and the dividend amount that is available to allocate toward these additions, which directly influences the extent of additional coverage that can be purchased. Thus, since the beneficiary's age does not affect any of these parameters, it does not play a role in determining the amount of coverage that can be acquired through paid-up additions.