Universal life insurance combines elements from term and whole life insurance. Term policies provide a death benefit savings component, whole life policies provide a death benefit savings component, and universal policies provide a death benefit savings component. To understand how universal premiums are allocated, consider the following example. Shen is a 38-year-old lawyer who has taken out a universal life insurance policy to protect his two children (ages 9 and 9) in the event of his death. Each year, Shen chooses how much he 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 ) portion of the policy. This money earns interest at a cash value (or 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 Year 3 Year 1 Year 2 Premium (annual contribution) $2,548 $2,025 $1,542 Administrative fee $95 $95 $95 $90 $90 Cost of death benefit $90 Amount added to cash value The cost of the death benefit portion of universal policies is only fixed for certain periods and rises with age, as is the life insurance policies. Suppose that in the 13th year of his policy, his cost of death benefit has case with risen substantially. At the same time, he is paying college tuition and currently cannot afford to pay his life insurance premium True or False: Under the terms of a standard universal policy, if Shen stops paying his premiums, then his policy will be put on hold until he resumes payment (and pays back all missed premium payments) O True O False Universal life insurance combines elements from term and whole life insurance. Term policies provide a death benefit savings component, whole life policies provide a death benefit savings component, and universal policies provide a death benefit savings component. To understand how universal premiums are allocated, consider the following example. Shen is a 38-year-old lawyer who has taken out a universal life insurance policy to protect his two children (ages 9 and 9) in the event of his death. Each year, Shen chooses how much he 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 ) portion of the policy. This money earns interest at a cash value (or 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 Year 3 Year 1 Year 2 Premium (annual contribution) $2,548 $2,025 $1,542 Administrative fee $95 $95 $95 $90 $90 Cost of death benefit $90 Amount added to cash value The cost of the death benefit portion of universal policies is only fixed for certain periods and rises with age, as is the life insurance policies. Suppose that in the 13th year of his policy, his cost of death benefit has case with risen substantially. At the same time, he is paying college tuition and currently cannot afford to pay his life insurance premium True or False: Under the terms of a standard universal policy, if Shen stops paying his premiums, then his policy will be put on hold until he resumes payment (and pays back all missed premium payments) O True O False