Final answer:
A universal life policy is known as 'unbundled' because it allows the owner to see transparent details such as interest earned, expense charges, and cost of the insurance covering the death benefit.
Step-by-step explanation:
A universal life policy is often compared to a cash-value (whole) life insurance policy because it includes both a death benefit and a cash value component.
However, what makes the universal life policy unique, and sometimes referred to as 'unbundled,' is the transparency it provides the policy owner.
The owner can clearly see the interest earned on the cash value, the expense charges associated with maintaining the policy, and the cost of the insurance itself, which covers the death benefit portion.
These distinct accounts within the policy are critical for the policyholder's financial planning as they offer flexibility and the potential for growing savings through the interest earned.