[amp_mcq option1=”whole life” option2=”limited pay” option3=”universal” option4=”endowment” correct=”option3″]
The correct answer is: C. universal
A universal life insurance policy is a type of permanent life insurance that combines a death benefit with a cash value account. The cash value account grows tax-deferred, and can be used for a variety of purposes, such as retirement savings, college tuition, or a down payment on a home.
Whole life insurance is another type of permanent life insurance, but it does not have a cash value account. Instead, the premiums paid into a whole life policy are used to fund the death benefit and to cover the costs of insurance.
Limited pay life insurance is a type of permanent life insurance that allows you to pay the premiums for a shorter period of time than with a traditional whole life policy. However, the death benefit will be lower than with a whole life policy.
Endowment insurance is a type of permanent life insurance that is designed to accumulate a cash value over a period of time. The cash value can be used for a variety of purposes, such as retirement savings, college tuition, or a down payment on a home. However, endowment insurance policies typically have high fees and low returns.
In conclusion, a universal life insurance policy is a type of permanent life insurance that combines a death benefit with a cash value account. The cash value account grows tax-deferred, and can be used for a variety of purposes, such as retirement savings, college tuition, or a down payment on a home.