Series 10 Practice Exam 2025 – Complete Guide for Securities Sales Supervisor Prep

In the context of an HR-10 plan, it is important to understand the eligibility of different types of insurance as permissible investments within the plan. HR-10 plans, also known as Keogh plans, are designed for self-employed individuals and their businesses, allowing them to save for retirement with certain tax advantages.

Term life insurance is specifically designed to provide a death benefit for a set period of time, without a cash value component. Because HR-10 plans focus on investments that can grow over time for retirement purposes, products that do not accumulate cash value, such as term life insurance, do not align with the investment objectives of the plan.

On the other hand, options like cash life insurance and whole life insurance have a savings or cash value component that can grow over time, which makes them suitable for inclusion in HR-10 plans. Variable annuities with plan completion insurance also fall into the category of acceptable investments because they can provide both a death benefit and an accumulation of cash value.

Thus, term life insurance is not permitted as an investment in an HR-10 plan due to its nature of lacking a cash value component, which does not meet the investment growth objectives of the plan.