Question

In: Finance

Haley would like to know the difference between variable life insurance and universal life insurance. Which...

Haley would like to know the difference between variable life insurance and universal life insurance. Which of the following statements most accurately describes the difference?

a. Variable life insurance uses subcontracts that are invested to generate a guaranteed rate of return.
b. Universal life insurance uses a fixed mortality charge, and variable life insurance does not.
c. Variable life insurance has a death bene t that varies, and universal life insurance provides only a fixed death benefit.
d. Universal life insurance provides a crediting rate based on the insurance company’s general account subject to a minimum guarantee, and variable life insurance uses subaccounts that can fluctuate based on market returns.

Solutions

Expert Solution

D. Universal life insurance provides a crediting rate based on the insurance company's general account subject to minimum guarantee and a variable life insurance uses subaccounts that can fluctuate based on market returns.


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