17
QuizMultiple Choice

Life Insurance — Quiz

Question 17 • Financial Math

What is a significant drawback of the variable universal life insurance option?

Answer
A
no guaranteed death benefit after age 65
B
no guaranteed cash value accumulation
C
market risk, with potential for cash value decrease
D
fixed interest rate, with no potential for growth

Explanation

Variable universal life insurance invests its cash value in market-based investment options, so returns can fluctuate. A significant drawback is that poor investment performance can reduce the policy’s cash value. This market risk is why “potential for cash value decrease” is the correct choice.

AI-written and checked against the verified answer.

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