South Carolina Life Insurance Practice Exam

Under Option B in a universal life policy, what happens to the death benefit?

1. The death benefit decreases annually

2. The death benefit remains constant

3. The death benefit increases each year

4. The full death benefit remains until the policy matures

The correct answer is: The full death benefit remains until the policy matures

In a universal life insurance policy, Option B typically refers to the structure of the death benefit provided by the policy. In this context, the full death benefit typically remains intact until the policy matures or until the insured passes away, leaving beneficiaries with the total coverage specified in the policy. This means the policy's death benefit is not reduced over time, as might occur in some other options where benefits might decrease or adjust based on cash value. Instead, the policy maintains a consistent level of protection for the insured, ensuring that the full amount is available when needed, thereby providing peace of mind for policyholders and beneficiaries. The structure ensures that regardless of the policy's cash value performance, the beneficiaries will receive the full death benefit, offering financial security during the insured’s lifetime and beyond.