Question

R has a Variable Universal Life policy and has several years of great interest rates. What effect will a good rate of growth have on R's Death Benefit?

A: The death benefit will increase
B: The death benefit will decrease
C: The death benefit amount will stay the same
D: The policy will automatically be surrendered

Answer 1

A good rate of growth in a Variable Universal Life policy will increase the death benefit for R.

Step-by-step explanation:

A good rate of growth in a Variable Universal Life policy will increase the death benefit for R.

Variable Universal Life policies have a cash value component that can grow over time based on the performance of the underlying investments. As the cash value increases, it can be used to provide a higher death benefit. This means that R's death benefit will be higher if the policy experiences strong growth in interest rates.