Which policy type assures a minimum guaranteed rate of interest?

The correct answer is interest-sensitive whole life. This type of policy is designed to provide a guaranteed minimum interest rate on the cash value that builds up in the policy. In addition to this guaranteed rate, the policy may also participate in additional interest earnings that are based on the insurance company's investments, which can lead to potentially higher returns. However, the minimum guaranteed rate serves as a safety net for policyholders, ensuring their cash value will not fall below a certain level, regardless of the company's investment performance.

Variable whole life policies, on the other hand, do not guarantee a minimum interest rate. Instead, the cash value and death benefit can fluctuate based on the performance of various investment options chosen by the policyholder. Indexed whole life policies are linked to a stock market index, providing the potential for higher interest while still offering a minimum rate, but it may be subject to caps and participation rates that limit total returns. Joint life policies focus on covering two lives but do not specifically relate to interest rates or guarantees for policymakers.