A universal life insurance policy provides two types of death protection. The first type, known as Option A, provides a level death benefit. As the cash value increases:
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A. B. C. D.A
Universal life insurance is a type of permanent life insurance policy that offers both a death benefit and a cash value component. The cash value component of a universal life policy earns interest and may also include investment gains or losses depending on the policy's structure. Universal life policies typically offer a flexible premium payment schedule, which allows policyholders to adjust their premium payments and the amount of coverage.
Option A is a type of death benefit available with a universal life policy that provides a level death benefit. This means that the death benefit amount remains the same over the life of the policy, regardless of changes in the cash value component.
As the cash value of a universal life policy increases, the cost of the pure insurance protection provided by the policy decreases. This is because the policy's cash value can be used to pay for the cost of insurance protection. As a result, the policyholder may be able to reduce their premium payments or increase their coverage without increasing their premiums.
However, the amount of pure insurance protection provided by a universal life policy does not decrease as the cash value increases, contrary to what option A suggests. Instead, the amount of pure insurance protection remains the same or may increase, depending on the policy's structure and the premium payments made by the policyholder.
Therefore, option C is the correct answer: the amount of pure insurance protection remains the same.