The Main Difference Between Whole Life and Universal Life Policies

question 32

Multiple Choice

The main difference between whole life and universal life policies is

• A)whole life is permanent insurance while universal life is more concerned with a portfolio of investments and temporary insurance coverage.
• B)universal life has a guaranteed investment component while whole life has cash value with very conservative rates of return.
• C)in universal life the policyholder has control over investments while the insurance company controls the investments of a whole life policy.
• D)universal life policies are completely taxable while whole life cash values are not taxable.

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Definitions:

Accounting Fraud

Deliberate manipulation or falsification of financial records and statements to give a misleading view of a company's financial health.

Bond Ratings Agencies

Organizations that assess the creditworthiness of both sovereign and corporate issuers of debt securities, providing investors with information on the risk level of their investments.

Conflicts of Interest

Situations in which a person's private interests could potentially interfere with their professional obligations or duties, leading to biased decisions.

Financial Meltdown

A severe and sudden downturn in the financial markets, often leading to a loss of asset values and financial instability.