The correct answer is D. All of the above.
Universal life policies are a type of permanent life insurance that combines the features of term life insurance and whole life insurance. Like term life insurance, universal life insurance provides a death benefit that is paid out to your beneficiaries if you die during the policy term. However, like whole life insurance, universal life insurance also builds cash value over time. This cash value can be used for a variety of purposes, such as retirement savings, college savings, or debt consolidation.
If you stop paying premiums on a universal life policy, the policy will remain in force as long as the cash value is sufficient to cover the policy’s expenses. These expenses include mortality charges, which are used to pay for the cost of death benefits; expenses, which are used to cover the costs of running the insurance company; and policy charges, which are used to cover the costs of issuing and maintaining the policy.
If the cash value is not sufficient to cover the policy’s expenses, the policy will lapse. This means that the policy will no longer be in force and the death benefit will not be paid out.
It is important to note that universal life policies are not guaranteed to provide a death benefit. The death benefit is based on the cash value of the policy, which can fluctuate over time. If the cash value of the policy decreases, the death benefit may also decrease.
If you are considering a universal life policy, it is important to understand the risks and potential rewards of this type of insurance. You should also compare universal life policies from different insurance companies to find the policy that best meets your needs.