In Universal Life Insurance, which feature is guaranteed on the cash value regardless of market conditions?

• A. A guaranteed cash surrender value
• B. A minimum interest rate on the cash value
• C. A guaranteed death benefit
• D. A guaranteed dividend payout

Answer: (B)

Universal Life builds cash value that earns interest credited by the insurer, and many policies guarantee a minimum interest rate on that cash value. This guarantee ensures the cash value grows by at least that minimum rate regardless of market conditions, providing a predictable floor even when prevailing rates are low.

The other features aren’t guaranteed in the same way. The cash surrender value depends on the cash value, policy charges, and any loans or withdrawals, so it isn’t guaranteed to follow a set floor. The death benefit is a separate promise of protection, not a floor on cash value growth. Dividends are not a guaranteed or typical feature of universal life; they’re associated with participating whole life policies.