State RegulationsMI specificDifficulty 1/5
A universal life insurance policy issued in Michigan must separately identify which of the following policy elements?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
M.C.L. 500.4001 and M.C.L. 500.4037 define universal life by its transparency: the policy must separately identify the interest credits credited to the policy and separately identify the charges for mortality and expense. This unbundled structure is what distinguishes universal life from fixed-premium permanent products, because the policyowner can see each month how much was credited and how much was deducted. Requiring the separation prevents an insurer from hiding the cost of protection inside a single blended calculation.
Why the other options are wrong
- A) Universal life is not a dividend-paying whole life structure; guaranteed annual dividends are not its defining element.
- B) Flexible premiums, not a fixed payment schedule, are the hallmark of universal life.
- D) A single blended interest rate is exactly what universal life must avoid; credits and charges must be separately identified.
Memory hook
UL shows three lines: interest, mortality, expense.