Universal life insurance combines elements from term and whole life insurance Term policies provide a: O Death benefit and a savings component O Death benefit only O Savings vehicle only Whole life policies provide a O Death benefit and a savings component with fixed rate features O Savings vehicle only O Death benefit and a savings component with variable rate features Universal policies provide a: Death benefit and a savings component with variable rate features O Death benefit only O Savings vehicle only To understand how universal premiums are allocated, consider the following example Larry is a 40-year-old lawyer who just bought a universal life insurance policy to protect his two children (ages 11 and 13) in the event of his death. Each year, Larry chooses how much he would like to contribute to the policy, as shown in the first row of the following table. An administrative fee along with the cost of the death benefit (the portion of the policy) is the payment. The resulting amount goes into the added to subtracted from ure insurance savingS cash-value (or ) portion of the policy. This money earns interest at a rate of market-based fixed savings ure insurance 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. Premium (Annual Contribution) Administrative Fee Cost of Death Benefit Amount Added to Cash Value Year 1 $2,700 85 100 Year 2 $2,200 85 100 Year 3 $1,500 85 100 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 11th year of his policy, Larry's cost of death benefit term whole has 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 Larry stops paying his premiums, then Larry's policy will be canceled, and the value of the cash portion will be paid out to him immediately alse rue Universal life insurance combines elements from term and whole life insurance Term policies provide a: O Death benefit and a savings component O Death benefit only O Savings vehicle only Whole life policies provide a O Death benefit and a savings component with fixed rate features O Savings vehicle only O Death benefit and a savings component with variable rate features Universal policies provide a: Death benefit and a savings component with variable rate features O Death benefit only O Savings vehicle only To understand how universal premiums are allocated, consider the following example Larry is a 40-year-old lawyer who just bought a universal life insurance policy to protect his two children (ages 11 and 13) in the event of his death. Each year, Larry chooses how much he would like to contribute to the policy, as shown in the first row of the following table. An administrative fee along with the cost of the death benefit (the portion of the policy) is the payment. The resulting amount goes into the added to subtracted from ure insurance savingS cash-value (or ) portion of the policy. This money earns interest at a rate of market-based fixed savings ure insurance 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. Premium (Annual Contribution) Administrative Fee Cost of Death Benefit Amount Added to Cash Value Year 1 $2,700 85 100 Year 2 $2,200 85 100 Year 3 $1,500 85 100 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 11th year of his policy, Larry's cost of death benefit term whole has 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 Larry stops paying his premiums, then Larry's policy will be canceled, and the value of the cash portion will be paid out to him immediately alse rue