Series 63 practice questionmediumSecurity vs. Non-Security Scenario
A client purchases an endowment policy from a life insurance company. Under the USA, this policy is:
- ANot a security, because it is a fixed insurance product✓ Correct answer
- BA security, because it has a cash value feature
- CA security only if the insurer is publicly traded
- DA security only if the policy is exchange-traded
Explanation
Why A — Not a security, because it is a fixed insurance product
Fixed insurance products, such as endowment policies, are excluded from the definition of a security under the USA, even if they offer a cash value or are issued by public companies.
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