Which of the following is true about universal life insurance?

What is the advantage of universal life insurance?

Advantages of universal life

The major benefits of universal life are flexibility and cash value growth. Flexible premiums. Universal policies allow you to change the size and frequency of your payments, which can be handy when times are lean.

What is universal life vs whole life?

Whole life and universal life insurance are both types of permanent life insurance. Whole life insurance offers consistent premiums and guaranteed cash value accumulation, while a universal policy provides flexible premiums and death benefits. You can borrow against the cash value of a whole or universal policy.

How is a variable universal life insurance policy different from a universal life insurance policy quizlet?

Universal life gives the policyholder the flexibility to skip some premium payments. Variable life invests premiums in a separate account and typically invests in equities, whereas both whole life and universal life invest premiums in the general account, which must be heavily invested in fixed income securities.

Which of the following is a benefit of purchasing variable life insurance quizlet?

Variable life offers the potential of greater death benefits and higher cash value, compared to whole life policies.

What type of interest rate is guaranteed in universal life policies?

Fixed Universal Life products express their minimum guaranteed rates as a guaranteed annual return rate. If the minimum guarantee is 3.00%, and the rate gets dropped to that level, the insurance carrier will credit 3.00% annually.

What is universal life Singapore?

The Universal Life (UL) is a plan that provides life insurance coverage as well as a savings/investment component. ... The insurance element usually only provides death coverage – when death happens, your family will get a multiple of what you put in.

How is a variable universal life insurance policy different from a universal life insurance policy?

The key difference between variable and universal life insurance is the way the cash value grows. While variable life insurance gives you investment options to grow your cash value, the cash value in a universal life insurance policy grows at a rate set by the insurer.

What are two components of universal policy?

Universal life insurance has two components: death benefit coverage and an accumulating cash value. When you pay your monthly premium, it's split between the two parts of your policy, with a portion going to each.

What is universal life product?

What Is Universal Life (UL) Insurance? Universal life (UL) insurance is permanent life insurance (lasting the lifetime of the insured) that has an investment savings element and low premiums similar to those of term life insurance. Most UL insurance policies contain a flexible-premium option.

What type of premium do both universal life and variable universal life policies have?

Both VUL and universal life insurance have cash value. VUL provides the option to invest cash value in stocks and bonds, while universal life usually does not. Universal life policies usually accumulate cash value through a money market interest rate. Both VUL and universal life have adjustable premium payments.

Which of the following would help prevent a universal life policy?

Which of the following would help prevent a universal life policy from lapsing? Reasons: The target premium is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime.

Which of the following would be a difference between a universal life insurance policy and a scheduled premium variable life insurance policy?

Variable life insurance provides no inflation protection for the death benefit, whereas universal variable life insurance does. Variable life insurance requires scheduled premium payments, whereas universal variable life insurance permits flexible premium payments.

What type of premium do both universal life and variable universal life policies have quizlet?

Both Universal Life and Variable Universal Life have a? Graded-Premium Whole Life policy premiums are typically lower initially, but gradually increase for a period of 5 to 10 years.

Why is variable universal life insurance regulated by both federal and state?

Why? Because of investment risks, variable policies are considered securities contracts. They are regulated under the federal securities laws. Following the federal regulations, sales professionals must provide a prospectus of available investment products to potential buyers.

Which of the following is a key distinction between variable whole life and variable universal life?

Which of the following is a key distinction between variable whole life and variable universal life products? A Variable whole life allows policy loans from the cash value. ... Variable whole life has a guaranteed death benefit.

What is universal life insurance how does it differ from term life and whole life universal life insurance quizlet?

Additionally, due to its lifetime coverage, universal life typically has higher premium payments than term. Whole life insurance is a type of permanent life insurance designed to provide lifetime coverage. Because of the lifetime coverage period, whole life usually has higher premium payments than term life.

Which of the following is true about the credit life insurance?

All of the following are true regarding credit life insurance, EXCEPT: As the debt is paid off, the face amount decreases to match the amount of the debt. At any time, the face amount of the policy cannot be greater than the amount of the debt. Credit life policies may be issued individually or through a group policy.

What happens to cash value in universal life policy at death?

Universal life insurance has a cash value component that is separate from the death benefit. Each time you make a premium payment, a portion is put toward the cost of insurance (such as administrative fees and covering the death benefit) and the rest becomes part of the cash value.

What are the disadvantages when consider in purchasing universal life insurance?