A universal life policy is issued with a $250,000 specified face amount. Under Death Benefit Option B (increasing), if the cash value grows to $40,000 ten years later, the total death benefit payable is approximately:

Why this is the answer

Universal life carriers offer two standard death benefit configurations. Option A (Level) keeps the total death benefit equal to the face amount; as cash value grows, the insurer's net amount at risk shrinks, lowering monthly cost-of-insurance charges. Option B (Increasing) pays face amount plus the accumulated cash value; net amount at risk stays level (the face amount), so cost-of-insurance charges stay higher but the beneficiary receives the side fund on top of the policy face. Both options must respect the IRC §7702 corridor to retain life insurance tax treatment.