What options do policyholders have if they outlive the expected benefit period of a VUL policy?

Policyholders of a Variable Universal Life (VUL) policy have several options if they outlive the expected benefit period, and the correct choice clearly reflects these possibilities. Specifically, policyholders may convert the policy to another type, which could allow for continued coverage but potentially with different terms or conditions. Additionally, they are entitled to take a lump-sum cash payout, which represents the cash value accumulated in the policy over time. This flexibility is a key feature of VUL policies, allowing policyholders to choose the option that best aligns with their financial needs and circumstances.

Continuing coverage with adjusted terms means that the policyholder can retain their insurance even beyond the expected benefit period, though the terms or premium payments may differ based on the insurer’s provisions. This adaptability provides a safety net for policyholders as they age or if their financial situation changes unexpectedly.

The other options presented are not viable choices available to policyholders in this situation. Surrendering the policy is restrictive and does not cover the full scope of available choices. Extending the benefit period is not an inherent option within VUL policies, and the notion that policyholders will automatically receive cash payments without actively choosing to do so is misleading, as the cash payout would require an action on the policy