What happens to the death benefit in Option A of a universal life policy?

In Option A of a universal life policy, the death benefit is designed to remain level, meaning it stays the same over time, even as the cash value of the policy accumulates. This structure allows the policyholder to build equity in the form of cash value while maintaining a consistent death benefit amount for beneficiaries.

This type of arrangement provides the advantage of predictability; policyholders can plan their finances with the assurance that their beneficiaries will receive a set amount, regardless of changes in the cash value. The increase in cash value does not affect the amount paid out upon death, thus protecting the death benefit for the beneficiaries.

Other options suggest varying implications for the death benefit, such as fluctuations or decreases based on other factors, but these do not accurately reflect the mechanics of Option A in a universal life policy where the level death benefit is a defining feature.