Question: Which Of The Following Combinations Best Describe A Universal Life Insurance Policy?


What best describes a universal life insurance policy?

Universal life (UL) insurance is a form of permanent life insurance with an investment savings element plus low premiums. The price tag on universal life (UL) insurance is the minimum amount of a premium payment required to keep the policy. Beneficiaries only receive the death benefit.

Which policy feature makes a universal life policy?

Which policy feature makes a universal life policy different from a whole life policy? A flexible premium schedule”. The policy feature that makes universal life different from whole life insurance policies is its flexible premium schedule.

What are the two components of a universal life policy?

Universal policy premiums include two components: the cost of insurance amount and the savings component amount, also known as the cash value.

Which of the following is true about universal life insurance?

Which of the following is true of universal life insurance? The amount of insurance coverage cannot be changed. Premiums are set and cannot be changed. It does not clearly state the rate of interest that is credited on the policy reserves.

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Does a universal life policy expire?

A universal life policy will expire if you stop paying the premiums and the cash value becomes depleted. If you need life insurance, it’s best to keep the policy payments up to date. If you have to buy a new policy later you’l be charged at your older age and may have to take a new life insurance medical exam.

What happens when a universal life insurance policy matures?

When a policy reaches its maturity date, you generally receive payment and coverage ends. Depending on the policy, the payment might be the death benefit or a specified dollar amount, but it’s usually equal to the policy’s cash value.

What are the disadvantages of universal life insurance?

The Disadvantages of Universal Life Insurance

  • Universal Life Has A Sensitivity To Cash. The cash element to universal life insurance is not the same as whole life insurance.
  • Universal Life Insurance Can Lapse If You’re Not Careful.
  • Term Life Versus Universal Life Premiums.

Can you cash out a universal life insurance policy?

Final Word – Can You Cash In Universal Life Insurance? Cash -value life insurance policies like universal and whole life insurance accumulate cash in the policy. With universal life insurance, you are able to withdraw this cash. Although cash can be withdrawn, it might not be the best idea.

How much is a universal life policy?

How much universal life insurance costs

Policy value Whole life Universal life
$1 million $10,747 $5,962
Female, age 40
$250,000 $2,441 $1,450
$500,000 $4,825 $2,840


What is a corridor in relation to a universal life insurance policy?

What is a corridor in relation to a Universal Life insurance policy? The gap between the total death benefit and the policy’s cash value. The gap between when a claim is filed and when the death benefit is received.

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Is a universal life policy taxable?

As long as your policy has cash value, all growth within that cash value account or variable universal life subaccounts is tax-free. Any commensurate growth in eventual death benefit is also tax-free. Loans against your policy are tax-free. There are no age restrictions on this benefit.

What happens when a universal life policyholder pays the target premium?

What happens when a universal life policyholder pays the target premium? Paying the target premium will build cash value in the policy, and the policy will resemble whole life insurance. Each month, the cost of the death protection is deducted from the cash value, and the current interest rate is credited.

What are the benefits of a universal life policy?

It’s permanent life insurance – like whole life – with coverage that lasts a lifetime and builds actual cash value. A universal life policy also gives you the flexibility to raise or lower premium payments within certain limits, so it can cost less than whole life coverage.

What is a universal life policy in insurance?

Universal life insurance is a type of permanent life insurance. With a universal life policy, the insured person is covered for the duration of their life as long as they pay premiums and fulfill any other requirements of their policy to maintain coverage.

What is a fixed universal life insurance policy?

Fixed universal life provides flexible premium payments and reliable cash value growth tied to a fixed interest rate, offering stable growth over time. Because these policies have a guaranteed crediting rate, you are not subject to investment risk and your cash value accumulates regardless of market fluctuations.

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