What typically happens if a policyowner increases the face amount of a Universal Life policy?

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When a policyowner increases the face amount of a Universal Life policy, proof of insurability is typically required. This means that the policyowner must demonstrate their health status and provide information that assures the insurer of their risk level. This requirement allows the insurance company to properly assess and price the increased risk associated with the higher coverage amount.

In Universal Life policies, the face amount refers to the death benefit of the policy; increasing it may impose additional risk on the insurer. Since the insurer needs to evaluate whether the policyowner’s health remains acceptable, they will usually require medical underwriting or other forms of proof of insurability before agreeing to the increase.

While some policies might have provisions for increasing coverage without evidence of insurability under specific circumstances, this is generally not the standard practice for Universal Life policies when face amounts are raised. The other options, such as automatic premium adjustments or increases in cash value, do not typically relate directly to the requirement for proof of insurability.

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