Which type of permanent life insurance integrates a cash value component with a flexible premium and death benefit that can vary based on investment performance?

• A. Whole Life
• B. Term
• C. Universal Life
• D. Variable Life

Answer: (C)

Universal life offers a permanent life policy with a cash value component and the ability to adjust premium payments and the death benefit over time. The cash value grows based on interest credited by the insurer, and you can influence the policy by varying how much you pay and by choosing a death benefit option that can be increased as the cash value accumulates. This combination—cash value alongside flexible premiums and an adjustable death benefit—fits a product designed for flexibility while maintaining permanent coverage.

Whole life has fixed premiums and a fixed death benefit, with guaranteed cash value growth. Term provides coverage for a fixed period and normally has no cash value. Variable life bases cash value and death benefit on separate investment accounts and typically involves fixed premiums, with investment performance driving the value. Hence, the universal life description is the best fit.