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SOFE AFE Exam - Topic 1 Question 111 Discussion

With traditional whole life insurance:
C) an interest rate on reserves is implicit in the premium rate and is locked in at time of policy issuance
A) an interest rate on reserves is implicit in the premium rate and is unlocked at time of policy issuance
B) an expense rate on reserves is explicit on the premium rate and is locked in at time of policy issuance
D) a debt rate on reserves is implicit in the premium rate and is unlocked at time of policy issuance

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:

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Suggested Answer: C

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

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Daniel
2 hours ago
I think option A makes the most sense. Interest rates change over time.
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Vicky
5 days ago
D sounds off, I don't think there's a debt rate involved.
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Earnestine
10 days ago
C seems to make the most sense to me.
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Andrew
16 days ago
Wait, I thought interest rates were always locked in?
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Rodolfo
2 months ago
I think B is the right answer, not A.
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Arlene
2 months ago
A is definitely correct, that's how it works.
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Adaline
3 months 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
3 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
3 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
3 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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