An insurance advisor is explaining to Clara, a 38-year-old professional in Quebec, the 'blended' Universal Life policy design. Clara wants to maximize her death benefit for estate planning while keeping premiums as low as possible and maintaining tax efficiency. What is the primary characteristic of a blended UL policy relevant to Clara's goals?

Question: An insurance advisor is explaining to Clara, a 38-year-old professional in Quebec, the 'blended' Universal Life policy design. Clara wants to maximize her death benefit for estate planning while keeping premiums as low as possible and maintaining tax efficiency. What is the primary characteristic of a blended UL policy relevant to Clara's goals?

Answer options:

• It uses a single COI structure for both the base and additional insurance.
• It combines a participating whole life component with a term rider. ✅ It combines a low-COI base Universal Life policy with a term rider to achieve a higher initial death benefit at a lower cost.
• It automatically adjusts the death benefit and COI based on the policy's cash value.

Correct answer: It combines a low-COI base Universal Life policy with a term rider to achieve a higher initial death benefit at a lower cost.

Explanation: A blended UL policy typically combines a base UL policy with a lower face amount (and thus lower COI) with a term insurance rider for the additional desired death benefit, providing high coverage at a more economical premium initially.