Question

Samantha purchased a universal life policy when the death benefit in the policy was $200,000. With a current cash value of $50,000, she has selected death benefit option B. How much is her current death benefit?

Answer 1

Samantha's current death benefit would be $250,000. This is because with death benefit option B in a universal life policy, the death benefit includes the original policy amount plus the accumulated cash value.

Step-by-step explanation:

The subject of this question involves a universal life insurance policy. Universal life insurance is a type of cash-value (whole) life insurance that not only provides a death benefit but also builds up a cash value. This cash value can be used by the policyholder for various purposes during their lifetime.

Samantha has a universal life policy with death benefit option B. This option typically means that the death benefit will include the policy's cash value in addition to the face amount of the policy. Since the original death benefit in the policy was $200,000 and the current cash value is $50,000, Samantha’s current death benefit would be the sum of these two amounts, equating to $250,000.