Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A universal life policy includes a no-lapse guarantee rider. What does this rider ensure?
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
A no-lapse guarantee, sometimes called a secondary guarantee, rider on a universal life policy keeps the death benefit in force even if the policy's cash value is insufficient or reaches zero, provided the policyowner pays at least the minimum premiums required by the rider each period. Without the rider, a UL policy could lapse when monthly charges exhaust the cash value; the guarantee protects coverage as long as the premium conditions are met. If the required premiums are not maintained, the guarantee terminates.
Why the other options are wrong
- B) The rider does not fix the premium forever; UL premiums remain flexible, and the rider only specifies a minimum premium path to preserve the guarantee. The premium remains flexible, and only the minimum premium path is fixed to keep the guarantee alive.
- C) A fixed guaranteed growth rate is a feature of fixed-account or whole life interest guarantees, not the no-lapse guarantee, which protects the death benefit rather than the cash value.
- D) The rider is not a tax device; death benefits retain their normal tax treatment regardless of the rider. The rider has no tax effect, and the death benefit is taxed under the normal rules either way.
Memory hook
No-lapse = even with zero in the tank, keep paying the minimum and coverage survives.