Which policy offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested?

• A. Variable universal policy
• B. Endowment policy
• C. Term policy
• D. Whole life policy

Answer: (A)

This item focuses on which life insurance product lets you adjust how much you pay, change the death benefit, and actively choose how the cash value is invested. The product that fits all three is the variable universal life policy. It combines universal life’s flexible premium structure with the ability to set the death benefit as needs change, and it lets you allocate the cash value to separate investment accounts chosen by you. The growth of the cash value depends on the performance of those investments, and you bear the investment risk.

Why the other types don’t fit as well: endowment policies typically have fixed premiums and a savings component tied to a maturity date, with little or no investment choice or adjustable death benefit. term policies provide pure protection for a specified term and have no cash value to invest. whole life offers a guaranteed cash value with fixed premiums and a predetermined death benefit, but it doesn’t give you investment control for the cash value.