Digital Court Reporting Practice Exam

Which of the following statements is TRUE regarding the premium payments in a Universal Life insurance policy?

Premiums are fixed and must be paid on a scheduled basis. Premiums are flexible and can be adjusted by the policyowner, provided there is sufficient cash value to cover policy expenses. Premiums are determined solely by the insurer and cannot be changed by the policyowner. Premiums are invested in a separate account and fluctuate with market performance.

Correct Answer:

Premiums are flexible and can be adjusted by the policyowner, provided there is sufficient cash value to cover policy expenses.

Explanation:

Universal life insurance is known for its flexible premiums, allowing the policyowner to vary the amount and frequency of premium payments, as long as the policy's cash value is sufficient to cover the cost of insurance and other expenses.

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