Purchased a cash-value life insurance policy

Reference no: EM131047853

Megan, age 32, is married and has a son, age

1. She recently purchased a cash-value life insurance policy that has the following characteristics:

¦ The frequency and amount of premium payments are flexible.

¦ The insurance and saving components are separate.

¦ The interest rate credited to the policy is tied to current market conditions, but the policy guarantees a minimum interest rate.

¦ The policy has a back-end surrender charge that declines to zero over some time period. Based on the above characteristics, what type of life insurance did Megan purchase? Explain your answer.

Reference no: EM131047853

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