Smaller, larger
Larger, smaller
Smaller, Smaller
Larger, larger
Answer is Right!
Answer is Wrong!
The correct answer is: B. Larger, smaller
In universal life products, the larger the size of the premium, the larger the coverage provided and the smaller the policy cash value. This is because the premium is used to pay for both the death benefit and the cash value. The larger the premium, the more money is available to pay for the death benefit, which means that the coverage provided is larger. However, the larger the premium, the less money is available to accumulate in the cash value, which means that the cash value is smaller.
Here is a brief explanation of each option:
- Option A: Smaller, larger. This is not correct because the larger the premium, the larger the coverage provided.
- Option B: Larger, smaller. This is the correct answer because the larger the premium, the larger the coverage provided and the smaller the policy cash value.
- Option C: Smaller, smaller. This is not correct because the larger the premium, the larger the coverage provided.
- Option D: Larger, larger. This is not correct because the larger the premium, the smaller the policy cash value.