A policy with a cash value that grows and a death benefit that may increase is which type?

• A. Term policy
• B. Whole life with increasing face
• C. Universal life policy
• D. Variable life

Answer: (C)

Universal life focuses on a flexible premium policy that builds cash value and offers an adjustable death benefit. The cash value grows over time as interest is credited to the account, and the death benefit isn’t fixed—policyholders can have a level death benefit or an increasing death benefit that rises as the cash value grows. That combination of growing cash value with the potential for a higher death benefit is what defines this type.

Term policies have no cash value, so they don’t fit. Whole life with increasing face builds cash value with a fixed premium and typically a more rigid death benefit structure, not the flexible, growth-oriented setup described. Variable life also builds cash value and can increase the death benefit based on investment performance, but the distinctive feature in this description is the growing cash value paired with an adjustable death benefit, which points to universal life.