What determines the death benefit in a VUL policy?

The death benefit in a Variable Universal Life (VUL) policy is determined by the structure of the policy and any chosen riders. This customization allows the policyholder to select different options that can enhance the death benefit, such as adding riders for accidental death or increasing the base amount of coverage.

In a VUL policy, the death benefit can be designed in various ways, typically either as a level amount or an increasing amount that takes into account the policy's cash value. The interplay between the cash value and the chosen base death benefit, along with any riders, dictates the final benefit that will be paid out upon the insured's death.

While factors like the policyholder's age at the time of enrollment may influence premiums and underwriting, and total premiums paid can affect the cash value, they do not directly determine the death benefit structure. Interest rates, although they can affect the cash value growth over time, do not influence the gross amount of the death benefit at the time of the insured's passing. Thus, the comprehensive nature of the policy design and selected enhancements through riders are central to understanding how the death benefit is established and adjusted.