The correct answer is: D. Terminate
Variable life insurance is a type of permanent life insurance that provides both death benefit protection and a cash value account. The cash value account is invested in a variety of underlying assets, such as stocks, bonds, and mutual funds. The value of the cash value account can fluctuate over time, depending on the performance of the underlying investments.
If the cash value of a variable life insurance policy becomes zero, the policy will terminate. This means that the death benefit will no longer be in effect and the policy owner will not be able to withdraw any money from the cash value account.
There are a few reasons why the cash value of a variable life insurance policy might become zero. One reason is that the underlying investments might perform poorly. Another reason is that the policy owner might withdraw money from the cash value account too often or too much.
If you are considering purchasing a variable life insurance policy, it is important to understand the risks involved. You should also make sure that you are comfortable with the potential for the cash value of the policy to fluctuate over time.
Here is a brief explanation of each option:
- A. Continue – This option is not correct because if the cash value of a variable life insurance policy becomes zero, the policy will terminate.
- B. Converted into term ins – This option is not correct because variable life insurance is a type of permanent life insurance. Term life insurance is a type of temporary life insurance that does not have a cash value account.
- C. Surrender – This option is not correct because if the cash value of a variable life insurance policy becomes zero, the policy will terminate. The policy owner will not be able to surrender the policy and receive any money from the cash value account.
- D. Terminate – This option is correct because if the cash value of a variable life insurance policy becomes zero, the policy will terminate.