Life Insurance FundamentalsQuestion 126 of 315
Under a Universal Life policy with Option A (Type I), how does the death benefit behave as cash value grows?
a.Total death benefit rises along with the cash value
b.Total death benefit stays level; the pure insurance portion shrinks
c.Total death benefit shrinks at the same rate as the cash value grows
d.Total death benefit is unrelated to cash value because UL has no cash value
Explanation
Option A (Type I) is the level death benefit choice in UL. As cash value grows inside the policy, the insurance company's net amount at risk falls so that the total death benefit paid stays the same.
Law Reference: Standard insurance principles; Cal. Ins. Code §10540Practice all 315 questions free — no signup required.
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