South Carolina Life Insurance Practice Exam

What universal life option has a gradually increasing cash value and a level death benefit?

1. Option A

2. Option B

3. Option C

4. Option D

The correct answer is: Option A

The correct answer is based on the understanding of the different options available in universal life insurance policies. Option A refers to a universal life insurance policy configuration that provides a level death benefit while allowing the cash value to gradually increase over time. In this specific context, "level death benefit" means that the amount payable to the beneficiary upon the death of the insured remains constant throughout the life of the policy. The gradually increasing cash value component is important because it reflects the policy's growth as additional premiums are paid and interest is credited to the cash value. This structure allows the insured to have a predictable death benefit while potentially benefiting from the accumulation of cash value. This setup is distinct from other options that may modify the death benefit or have different cash value growth characteristics. Understanding these nuances is critical for recognizing how universal life insurance policies can be tailored to meet varied financial goals and insurance needs.