What can happen if a policyholder stops making premium payments on a VUL policy?

The situation described in the question pertains to the consequences of ceasing premium payments on a Variable Universal Life (VUL) policy. When a policyholder stops making premium payments, the policy relies on its cash value to sustain itself. The cash value accumulates over time through the premiums paid, along with investment performance. If the premiums are not continued, the accumulated cash value may begin to be used to cover the cost of insurance and other policy charges.

As these costs accrue, if the cash value becomes depleted, there is a risk that the policy will lapse. A lapse means that the life insurance coverage terminates and the policyholder would no longer have any death benefit protection. This scenario highlights the importance of maintaining sufficient premium payments to keep the policy active and cover ongoing expenses.

The other options presented do not accurately reflect the consequences of stopping premium payments on a VUL policy. Converting to a whole life policy typically requires a formal process and is not automatic upon non-payment. Additionally, the death benefit does not automatically increase due to stopped payments; in fact, it may decrease or vanish altogether if the policy lapses. Locking of investment options is also not a direct result of stopping premium payments; rather, investments can typically continue as long as the