What is a death benefit in a VUL policy?

In a Variable Universal Life (VUL) policy, the death benefit is the amount that is paid to the beneficiaries upon the death of the policyholder. This benefit is designed to provide financial support to the insured's loved ones, helping them cover expenses such as mortgage payments, living costs, or other financial obligations.

The death benefit can vary depending on the specific features of the policy; it may be a level benefit or a variable amount that could increase with the policy's cash value accumulation or investment performance. The essence of this function is to ensure that in the unfortunate event of the policyholder's death, their beneficiaries receive a measure of financial security.

While other options mention aspects related to the financial structure of the policy, they do not pertain directly to the death benefit concept. For instance, premiums paid do not define the benefit payable to beneficiaries; instead, they contribute to maintaining the policy itself. Withdrawals during the policyholder’s lifetime refer to using the cash value but do not constitute a death benefit. Lastly, investment gains are important for the growth of the cash value but do not directly relate to the death benefit, which is fixed or defined as per the terms of the policy.