42. An insured wants to purchase a policy with three key elements: flexible premium, death benefit, and the choice of how the cash value will be invested. The insured should purchase
Answer: D
The insured should purchase a variable universal life policy.
A variable universal life policy offers the insured flexible premiums, a death benefit, and the ability to choose how the cash value is invested, meeting all three key elements desired.
A) graded premium whole life.
Graded premium whole life policies typically have fixed premiums that increase over time and do not offer the investment flexibility or choice in cash value allocation. Therefore, this option does not satisfy the insured's requirements for flexibility and investment control.
B) universal life.
Universal life policies provide flexible premiums and a death benefit, but they usually do not offer the same level of investment choice as variable universal life policies. While they allow for some investment options, they are generally more limited compared to the flexibility of a variable universal life policy.
C) adjustable life.
Adjustable life policies do allow for some flexibility in premiums and death benefits, but they do not provide the investment choices that a variable universal life policy does. This makes them unsuitable for the insured's desire for control over cash value investments.
D) variable universal life.
Variable universal life policies combine flexible premiums with a death benefit and provide the policyholder with a wide range of investment options for the cash value. This makes them the ideal choice for the insured who seeks flexibility and investment control.
Conclusion
The variable universal life policy is the only option that fully meets all three key elements required by the insured: flexible premiums, a death benefit, and the ability to choose how the cash value is invested. The other options either lack the necessary investment flexibility or do not provide the comprehensive features that define a variable universal life policy.