Question

When a policyowner cash surrenders a Universal Life insurance policy in its early years, this may be considered a red flag for a(n): a. Federal Fair Credit Act Violation. b. Title 18 Fraud violation. c. Anti-Money Laundering violation. d. Unfair Trade Practice violation.

Answer 1

Cash surrendering a Universal Life insurance policy in its early years may be considered an Unfair Trade Practice violation.

Step-by-step explanation:

When a policyowner cash surrenders a Universal Life insurance policy in its early years, this may be considered a red flag for a(n) Unfair Trade Practice violation. Universal Life insurance policies typically have a cash value component that accumulates over time. If a policyowner chooses to surrender the policy early, it may indicate that the policy was sold or structured in a way that was not in the best interest of the policyowner.