Question

VUL policies have a level death benefit until the policy's cash values reach the ________, at which point the variable death benefit applies, providing a variable death benefit according to investments in the separate account.

Answer 1

VUL policies have a level death benefit until the policy's cash values reach the specified threshold, at which point the variable death benefit applies.

Step-by-step explanation:

VUL policies have a level death benefit until the policy's cash values reach the specified threshold, at which point the variable death benefit applies, providing a variable death benefit according to investments in the separate account. In essence, a variable death benefit offers the potential for an increased death benefit if the underlying investments perform well over time. However, it's also important to manage the inherent investment risk, as poor performance could lower the amount your beneficiaries will receive.

Csh-value (whole) life insurance policies provide both a death benefit and a cash value. The cash value accumulates over time and can be used by the policyholder. Once the cash value reaches the specified threshold, the death benefit becomes variable and is determined by the performance of investments in the separate account.