5. Understanding universal life insurance Universal life insurance combines elements from term life insurance and whole life insurance. Term policies provide a death benefit provide a death benefit _component, whole life policies provide a death benefit example. savings component. To understand how universal premiums are allocated, consider the following Carlos is a 37-year-old lawyer who has taken out a universal life insurance policy to protect his two children (ages 8 and 9 ) in the event of death. Each year, Carlos chooses how much would like to contribute to the policy, as shown by the first row of the table below. The insurance company subtracts from this an administrative fee along with the cost of the death benefit (the portion of the policy) then puts the remainder into the cash value (or I portion of the policy. This money earns interest at a rate of return. Based on the given Information, calculate the amount that is added to the cash value portion of the pollicy in each of the first three years. The cost of the death benefit portion of universal policies is only fixed for certain periods and rises with age, as is the case with Ilfe insurance policies. Suppose that in the 14th year of his pollcy, his cost of death beneft has risen substantially. At the same time, he is helping to pay his mother's medical expenses after a mojor surgery and currently cannot afford to pay his life insurance premium. True or False: Under the terms of a standard universal policy, if Carlos stops paying his premiums Carlos is a 37-year-old lawyer who has taken out a universal life insurance policy to protect his two children (ages 8 and 9 ) in the event of death, Eac year, Carlos chooses how much would like to contribute to the policy, as shown by the first row of the table below. The insurance company subtracts from this an administrative fee along with the cost of the death benefit (the portion of the policy) then puts the remainder into the cash value (or ) portion of the policy. This money earns interest at a 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 certain periods and rises with age, as is the case with life insurance policies. Suppose that in the 14th year of his policy, hils cost of death benefit tias risen substantially. At the same time, he is helping to pay his mother's medical expenses after a major surgery and currently cannot afford to pay his life insurance premium. True or False: Under the terms of a standard universal policy, If Carlos stops paying his premlums, then his policy will be cancelled and the value of the cash portion will be paid out to him immediately. True False