An individual is deciding between a flexible premium variable life contract and a scheduled premium variable life contract. If she is concerned about maintaining a minimum death benefit for estate liquidity needs, she should choose:
A) the flexible premium policy because the contract's face amount cannot be less than a predetermined percentage of cash value.
B) the scheduled premium policy because the contract is issued with a minimum guaranteed face amount.
C) the flexible premium policy because earnings of the contract directly affect the face value of the policy and earnings can never be negative.
D) the scheduled premium policy because earnings do not affect the contract's face amount.
Answer: B) the scheduled premium policy because the contract is issued with a minimum guaranteed face amount.