The correct answer is C. Both A & B.
Traditional cash value plans and non-traditional plans both have several limitations.
Traditional cash value plans are life insurance policies that accumulate cash value over time. The cash value can be used for a variety of purposes, such as retirement savings, college savings, or a financial cushion in case of an emergency. However, traditional cash value plans can be expensive, and the cash value may not grow as quickly as you would like.
Non-traditional plans are life insurance policies that do not accumulate cash value. Instead, they invest your premiums in a variety of assets, such as stocks, bonds, and mutual funds. Non-traditional plans can be more expensive than traditional cash value plans, but they offer the potential for higher returns.
Both traditional cash value plans and non-traditional plans have several limitations. It is important to carefully consider your needs and goals before choosing a life insurance policy.
Here are some of the limitations of traditional cash value plans:
- High fees. Traditional cash value plans typically have high fees, which can eat into your investment returns.
- Low returns. The cash value in a traditional cash value plan may not grow as quickly as you would like.
- Taxes. You may have to pay taxes on the earnings from your cash value, even if you don’t withdraw them.
- Surrender charges. If you withdraw money from your cash value early, you may have to pay surrender charges.
Here are some of the limitations of non-traditional plans:
- High risk. Non-traditional plans are more risky than traditional cash value plans. Your investment could lose value, and you could end up with less money than you invested.
- Complexity. Non-traditional plans can be complex, and it can be difficult to understand the risks and fees involved.
- Lack of liquidity. You may not be able to access your money easily if you need it.
It is important to weigh the pros and cons of both traditional cash value plans and non-traditional plans before choosing a life insurance policy. The best plan for you will depend on your individual needs and goals.