Nancy purchased a life insurance policy with a face amount of $250,000.

This is an example of a universal life policy, specifically the type of universal life death benefit structure where the death benefit equals the specified face amount plus the cash value. Nancy started with a $250,000 face amount. As $50,000 of cash value accumulated, the total death benefit became $300,000. That structure is commonly associated with universal life death benefit Option B or increasing death benefit design. Modified premium whole life describes a premium pattern, not a death benefit that increases by adding cash value. Participating whole life can pay dividends, and dividends may be used to buy paid-up additions, but the question’s arithmetic—face amount plus accumulated cash value—is the classic universal life formulation. Limited-pay life describes how premiums are paid, not how the death benefit is calculated. The exam trigger is: face amount plus cash value equals increased death benefit. Reference topics: Universal Life Insurance, Increasing Death Benefit Option, Cash Value, Flexible Permanent Insurance.