Gwen purchased an interesting life insurance policy.A minimum interest rate is guaranteed on the cash value,but additional interest may be credited based on the investment performance of a group of common stocks.There is also a cap on the additional interest credited to the policy.Based on this information,what type of life insurance did Gwen purchase?

Question

Quizplus · Accepted Answer

Gwen purchased an indexed universal life insurance policy, as it guarantees a minimum interest rate while allowing for additional interest based on the performance of a group of common stocks with a capped limit. Variable life insurance and variable universal life insurance both allow for investment choices in various accounts, but do not offer a minimum guaranteed interest rate. Current assumption whole life insurance typically has a fixed interest rate and does not offer additional interest based on investment performance.

Gwen Purchased an Interesting Life Insurance Policy