Bill has a universal life policy that has been enforced for 3 years. his minimum...
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Bill has a universal life policy that has been enforced for 3 years. his minimum premiums are $131 per month. The fund value in his policy is 3,500. There is a surrender charge of $8,000 in effect for 5 more years on any withdrawals. Recently Bill lost his job and has had difficulty making monthly payments on his policy. Last month his bank reversed the payment because there was not enough money in his bank account. Bill received a notice from the insurance company that he missed a payment. What will happen to Bill's policy if he cannot be the premiums for a few months?
a. The policy will lapse after 30 days with non-payment.
b. Bill can borrow money from the insurance company using the fund value of the policy in order to continue making premium payments.
c. The fund value cannot be used because the surrender charge is greater than the fund value
d. The insurance company will draw down the money in the policy fund until Bill either reestablishes monthly payment, or he has enough Money in the fund to cover premiums.
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