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$5.$ Understanding universal life insurance

Universal life insurance combines elements from term life insurance and whole life insurance. Term policies provide a death benefit savings component, whole life policies provide a death benefit $.\_-$ savings component, and universal policies provide a death benefit savings component. To understand how universal premiums are allocated, consider the following example.

Van is a $43-$year$-$old lawyer who has taken out a universal life insurance policy to protect his two children $($ages $14$ and $13)$ in the event of death. Each year, Van chooses how much would like to contribute to the policy, as shown by the first row of the table below. The insurance company subtracts from this an administrative fee along with the cost of the death benefit $($the cash value $($or $-)$ portion of the policy. This money earns interest at a $\_$ portion of the policy$)$ then puts the remainder into the information, calculate the amount that is added to the cash value portion of the policy in each of the first three years.

$\backslash$table$[[,$Year $1,$Year $2,$Year $3],[$Premium $($annual contribution$),$$$2,851,$$$2,048,$$$1,716$