Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A no-lapse guarantee provision on a universal life policy:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The no-lapse guarantee (also called a secondary guarantee) promises that the policy will not lapse as long as the policyowner pays the required premium each year — even if the cash value is insufficient to cover the monthly cost of insurance and expenses. Coverage is guaranteed to a specified age (often 100 or 121) or for a stated period. It protects the insured against lapse caused by unfavorable credited interest or subaccount performance.
Why the other options are wrong
- B) The guarantee is about the persistence of coverage, not about a fixed investment return on the cash value.
- C) Premiums under the guarantee are recalculated when the policy is funded differently or riders change; the guarantee does not fix the premium for life.
- D) The guarantee operates by requiring the scheduled premium payment; it does not waive premiums when the cash value is depleted.
Memory hook
No-lapse = pay the scheduled premium and the policy stays alive, cash value be damned. A persistence promise, not a profit promise.