5. Understanding universal life insurance Universal life insurance combines elements from term life insurance and whole life insurance. Term policies provide a death benefit savings component, whole life polices provide a death benefit savings compenent, and universal policies provide a death benieft cavings component. To understand hov universal premilms are allocated, consider the following example: Rosa is a 42-vear-old lawyer who has taken out a universal life insurance policy to protect her two chitdren (ages 13 and 15 ) in the event of death. Each year. Rosa chooses how much would like to contribute to the policy, as shown by the first row of the table below. The insurance cimpany subtracts from this an administrabve fee along with the cost of the death benefit fte portion of the policy) then puts the iremainder into the cash value for portion of the policy. This money eams incerest at 3 rate of return. Based on the given information, calculate the amount that is added to the cash value portion of the policy in each of the first three years. The cost of the death benefit portion of universal policies is only fixed for certaln peniods and rises wich age. as is the caste waith. life insurance polices. Suppose that in the 9th year of her policy, her cost of death benefit has rimen wubstantialiy. Ac the same time. she is he ping to pay her mother's medical expenses after a major surpery and currently cannot afford to pay her life insurance premi urt. True or falser Under the termis of a standard universal pelicy, if Rosa stops paring her premiums. then thei administrative fee and cose of death benefit will be deducted from the savinge portan of her policy (assuming suficient eash value accumulation) and the peicy wish remain active. True False