Ann is considering the purchase of a life insurance policy with these characteristics: flexible premium payments,the insurance and savings components are separate,the interest rate credited to the cash value is tied to a changing market interest rate but a minimum interest rate is guaranteed,and a monthly administrative fee is charged.Ann is considering buying

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Universal life insurance meets all the characteristics described, including flexible premium payments, separate insurance and savings components, a variable interest rate tied to the market with a minimum guaranteed rate, and a monthly administrative fee. Whole life insurance and current assumption whole life insurance do not typically offer flexible premium payments or allow for separate savings and insurance components. Variable life insurance may offer the flexibility of separate components and variable interest rates, but may not guarantee a minimum interest rate and often has higher fees than universal life insurance.

Ann Is Considering the Purchase of a Life Insurance Policy