Question

Terry has been advised by his insurance agent to purchase a variable universal life insurance policy. He has sought your advice regarding this purchase. All of the following are characteristics of a variable universal policy, except:

A. The policy features increasing or decreasing death benefits and flexibility of variable premium payments
B. The policy owner has exclusive investment control over the cash value of the policy
C. The death benefit is guaranteed to be equal to the face value
D. The cash value of a variable universal life policy is dependent on premiums and investment returns

Answer 1

A variable universal life insurance policy (VUL) has features like increasing or decreasing death benefits, flexible premium payments, and the policy owner's control over cash value. However, the death benefit is not guaranteed to be equal to the face value of the policy.

Step-by-step explanation:

A variable universal life insurance policy (VUL) has several characteristics. It features increasing or decreasing death benefits and flexibility of variable premium payments. The policy owner also has exclusive investment control over the cash value of the policy. The cash value of a VUL policy is dependent on premiums and investment returns. However, one characteristic that does not apply to a variable universal policy is that the death benefit is guaranteed to be equal to the face value of the policy.