23. 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
Variable universal life is the appropriate policy for the insured's needs.
A policy that offers a flexible premium, a death benefit, and the ability to choose how the cash value is invested aligns perfectly with the features of a variable universal life insurance policy.
A) adjustable life.
Adjustable life insurance does allow for some flexibility in premium payments and death benefits, but it does not offer the investment choices for cash value that the insured is looking for. Therefore, it does not meet all the specified requirements.
B) universal term life.
Universal term life insurance provides a death benefit and may offer flexible premiums, but it does not accumulate cash value. Consequently, it fails to satisfy the insured's need for investment choice regarding cash value.
C) variable universal life.
Variable universal life insurance encompasses all the desired characteristics: it has flexible premiums, provides a death benefit, and allows the insured to make investment choices regarding the cash value. This makes it the best option for the insured’s requirements.
D) graded premium whole life.
Graded premium whole life insurance features fixed premium payments and a guaranteed death benefit, but it does not offer flexibility in premiums or options for investing cash value. Thus, it does not fulfill the insured's criteria.
Conclusion
Variable universal life is the only option that fully meets the insured's desire for a flexible premium structure, a death benefit, and the ability to control investment choices for cash value. The other options either lack one or more of these essential features or do not provide the necessary flexibility. Therefore, option C is definitively the correct answer.