What is indexed universal life and how are credited interest and caps determined?

• A. Interest is fixed and guaranteed, independent of index performance.
• B. Indexed universal life credits interest based on a stock index with a floor and cap; actual crediting depends on index performance, subject to policy terms.
• C. Interest is never capped and not subject to floors.
• D. Credited interest is always equal to the stock index value.

Answer: (B)