Connecticut Life Producer Practice exam

Which death benefit option does NOT increase over time in universal life policies?

1. Option A

2. Option B

3. Option C

4. Option D

The correct answer is: Option A

In universal life insurance policies, the death benefit options provide different structures for how the death benefit is calculated and may change over time. Option A typically refers to a level death benefit, where the death benefit remains constant throughout the life of the policy. This means that the death benefit does not increase as the cash value accumulates in the policy. In contrast, other options, like Option B, often allow for increased death benefits as the cash value grows, thereby ensuring that the payout can potentially be higher over time. The lack of increase in the death benefit under Option A is beneficial for policyholders who prefer predictability and stability in their benefits or who might want to ensure that more of their premiums contribute to the cash value rather than increasing the death benefit. Therefore, understanding these different options is crucial for policyholders to align their life insurance with their financial objectives and needs.