Which type of life insurance policy typically has flexible premiums and benefits?

Universal life insurance policies are designed with flexibility in mind. These policies allow policyholders to adjust their premium payments within certain limits, as well as alter the death benefit amount. This unique structure enables individuals to adapt their insurance coverage based on their changing financial situation and needs over time.

The flexibility of universal life insurance comes from its combination of a traditional policy's protection features with a savings component, which accumulates cash value. This cash value earns interest based on current market rates but can also be influenced by the insurer's performance. Policyholders can withdraw from or take loans against this cash value, offering an additional layer of adaptability.

Other types of life insurance, such as whole life insurance, provide fixed premiums and benefits over the life of the policy, whereas term life insurance is strictly protection-based, typically with a fixed term and no cash value accumulation. Variable life insurance does offer some level of investment control with cash accumulation options, but it does not allow the same degree of flexibility in premiums as universal life insurance. Thus, the distinction of universal life insurance as the policy with flexible premiums and benefits is clear in this context.