Which statement is true about variable universal life insurance?

Which statement is true about variable universal life insurance?

• A. The account value does not fluctuate over time
• B. It combines a death benefit with an investment element
• C. It guarantees a fixed death benefit at all times
• D. It does not allow for policy loans or withdrawals

Answer: (B)

Variable universal life insurance is a flexible premium, adjustable benefit life insurance product that indeed combines a death benefit with an investment component. This type of policy allows policyholders to allocate their premiums among various investment options, typically including stocks, bonds, and mutual funds, which can lead to varying account values. The investment component can grow based on the performance of these selected investments, providing the potential for growth over time, but also comes with the risk of fluctuations. This characteristic of having both a death benefit and an investment aspect is what distinctly defines variable universal life insurance, making the statement about it being a combination of these two elements accurate. Your choice emphasizes the unique nature of this product, as it offers flexibility in both premium payments and investment choices while still providing life insurance coverage.

Variable universal life insurance is a flexible premium, adjustable benefit life insurance product that indeed combines a death benefit with an investment component. This type of policy allows policyholders to allocate their premiums among various investment options, typically including stocks, bonds, and mutual funds, which can lead to varying account values.

The investment component can grow based on the performance of these selected investments, providing the potential for growth over time, but also comes with the risk of fluctuations. This characteristic of having both a death benefit and an investment aspect is what distinctly defines variable universal life insurance, making the statement about it being a combination of these two elements accurate.

Your choice emphasizes the unique nature of this product, as it offers flexibility in both premium payments and investment choices while still providing life insurance coverage.