All individuals and entities acting in a fiduciary capacity must act solely in the interest of the plan participants. Investment advisers, trustees and all individuals who exercise discretion over the plan including those who select the administrative personnel or committee are considered to be fiduciaries. ERISA Rule 404C provides an exemption from liability or a "safe harbor" for plan fiduciaries and protects them from liabilities that may arise from investment losses that result from the participant's own actions. This safe harbor is available so long as:

• The participant exercises control over the assets in their account.

• Participants have ample opportunity to enter orders for their account and to provide instructions regarding their account.

• A broad range of investment options is available for the participant to choose from and the options offer suitable investments for a variety or investment objectives and risk profiles.

• Information regarding the risks and objective of the investment options is readily available to plan participants.


Life insurance is a contract between an individual and an insurance company that is designed to provide financial compensation to the policyholder's beneficiaries in the event of the policyholder's death. There are several different types of life insurance policies, and it is important that the individual chooses a policy that best fits his or her needs. The types of life insurance covered on the Series 6 exam are:

. Whole life

• Variable life

• Universal life

• Variable universal life


A whole life insurance policy provides the insured with a guaranteed death benefit that is equal to the face amount of the policy as well as a guaranteed cash value that the policyholder may borrow against. The cash value of the policy is held in the insurance company's general account and is invested in conservative investments such as mortgages and real estate. The policy's cash value increases each year as the premiums are paid and invested. The death benefit and the premium payments are fixed by the insurance company at the time of issuance and remain constant for the life of the policy. The policyholder is covered from the date of issuance to the date of death, as long as the premiums are paid.

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