Proactive Licensing Practice Test

Universal life insurance is the type of life insurance that offers both a level and an increasing death benefit option. This flexibility is a key feature of universal life policies. With this type of insurance, policyholders can choose between a death benefit that remains level throughout the life of the policy or one that increases over time, which is typically tied to the cash value accumulation within the policy. The option for an increasing death benefit allows policyholders to adjust their coverage as their needs change, making it a versatile choice for those who might expect their financial responsibilities to grow over time. In addition to death benefits, universal life insurance accumulates cash value that can be borrowed against or withdrawn, adding another layer of planning for future financial needs. Other life insurance types, such as whole life, typically provide a level death benefit and have a defined cash value growth schedule. Term life insurance generally does not have cash value and is focused on providing coverage for a specific period, while endowment policies are designed to pay a benefit after a specified term or upon death, often providing a set amount rather than flexible death benefit options.