What are the key components of a Variable Universal Life policy?

The key components of a Variable Universal Life (VUL) policy include the death benefit, premium payments, cash value, and investment options.

The death benefit is the amount that is paid to the policy beneficiaries upon the death of the insured, serving as the primary purpose of the policy. Premium payments are the amounts policyholders pay to keep the coverage active and can vary in amount and frequency, providing flexibility to the policyholder. The cash value is a savings component that builds over time, allowing the policyholder to accumulate savings that can be accessed or borrowed against. Investment options are a unique feature of VULs, allowing the policyholder to allocate the cash value among various investment choices, which can lead to potential growth, depending on market performance.

The other options do not encompass the fundamental components of a Variable Universal Life policy. For instance, the inclusion of term life coverage suggests a focus on traditional term insurance rather than the flexible structure of VULs. Fixed premiums and guaranteed growth pertain more closely to whole life policies, which guarantee a fixed amount and a specific growth rate, rather than the variable nature of VUL. Finally, accidental death benefits and health benefits are not integral components of VULs, which specifically emphasize the death benefit and