In respect of Universal life insurance, which of the following statement is correct:-

The partial withdrawal once taken need not be repaid
Policy was kept in force even if premiums are not paid provided there were adequate investment returns
Both A & B
None of the above

The correct answer is: C. Both A & B

Universal life insurance is a type of permanent life insurance that combines the features of term life insurance and whole life insurance. It offers a death benefit, cash value accumulation, and flexibility in premium payments.

One of the features of universal life insurance is that the policy owner can take partial withdrawals from the cash value without having to surrender the policy. These withdrawals can be used for any purpose, such as paying for college, a down payment on a house, or retirement expenses.

Another feature of universal life insurance is that the policy can remain in force even if premiums are not paid, provided there are adequate investment returns. This is because the cash value of the policy can be used to pay the premiums.

However, it is important to note that taking partial withdrawals or not paying premiums can reduce the death benefit and cash value of the policy. It is also important to understand that universal life insurance is a complex product and it is important to consult with an insurance professional to determine if it is right for you.

Here is a brief explanation of each option:

  • Option A: The partial withdrawal once taken need not be repaid. This is correct. The policy owner can take partial withdrawals from the cash value of the policy without having to repay them. However, it is important to note that taking partial withdrawals can reduce the death benefit and cash value of the policy.
  • Option B: Policy was kept in force even if premiums are not paid provided there were adequate investment returns. This is also correct. The policy can remain in force even if premiums are not paid, provided there are adequate investment returns. However, it is important to note that not paying premiums can reduce the death benefit and cash value of the policy.
  • Option C: Both A & B. This is the correct answer. Both options A and B are correct.
  • Option D: None of the above. This is incorrect. Both options A and B are correct.