72. 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: C
The insured should purchase a variable universal life policy.
A variable universal life policy offers the insured the flexibility of premium payments, the provision of a death benefit, and the ability to choose how the cash value is invested, making it the ideal choice.
A) adjustable life.
Adjustable life insurance provides some flexibility in premium payments and death benefits, but it does not allow for the same level of investment choice regarding the cash value. Therefore, it does not fully meet all three key elements the insured is seeking.
B) universal term life.
Universal term life insurance primarily focuses on providing a death benefit with a level premium, but it lacks a cash value accumulation feature. Thus, it fails to satisfy the requirement for investment choice or flexibility in premium payments.
C) variable universal life.
A variable universal life policy meets all the criteria outlined by the insured: it allows for flexible premium payments, includes a death benefit, and provides the option to invest the cash value in various investment vehicles. This makes it the most suitable option.
D) graded premium whole life.
Graded premium whole life insurance is characterized by lower initial premiums that gradually increase over time, but it does not offer flexible premiums or the ability to choose investment options for cash value. Consequently, it does not align with the insured's requirements.
Conclusion
The variable universal life policy is definitively the correct choice as it encompasses all three critical elements desired by the insured. In contrast, the other options fail to provide either the necessary flexibility in premiums, the death benefit, or the investment choices needed to fulfill the insured's objectives.