SOFE AFE Exam - Topic 1 Question 111 Discussion

Actual exam question for SOFE's AFE exam

Question #: 111
Topic #: 1

[All AFE Questions]

With traditional whole life insurance:

Aan interest rate on reserves is implicit in the premium rate and is unlocked at time of policy issuance

Ban expense rate on reserves is explicit on the premium rate and is locked in at time of policy issuance

Can interest rate on reserves is implicit in the premium rate and is locked in at time of policy issuance

Da debt rate on reserves is implicit in the premium rate and is unlocked at time of policy issuance

Show Suggested Answer

Suggested Answer: C

by Marci at Apr 04, 2026, 02:43 PM

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Rodolfo

18 days ago

I think B is the right answer, not A.

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Arlene

23 days ago

A is definitely correct, that's how it works.

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Adaline

1 month ago

I don’t recall much about debt rates in this context. I thought whole life insurance primarily dealt with interest and expense rates.

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Arminda

2 months ago

I’m leaning towards option C because I remember something about interest rates being locked in at the time of policy issuance, but I could be mixing it up with another topic.

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German

2 months ago

I feel like we practiced a similar question where the expense rate was mentioned. I think it was explicit and locked in, but I can't recall the details.

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Chantay

2 months ago

I think I remember that the interest rate is usually implicit in the premium, but I'm not sure if it's locked in or unlocked at issuance.

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