Which life insurance policy commonly features flexible premiums?

• A. Term Life
• B. Universal Life
• C. Whole Life
• D. AD&D

Answer: (B)

Flexible premiums are a hallmark of universal life insurance. In this type of policy, the policyowner can adjust both the amount and timing of premium payments, within certain minimums to keep the policy in force. Any premium above the ongoing cost of insurance and expenses goes into cash value, which earns interest. That cash value can support the policy if you pay less or even if you skip a payment, and it can also influence the death benefit, which may stay level or be increaseable over time. In contrast, term life typically has fixed premiums for a set term, whole life uses fixed premiums for a guaranteed cash value, and AD&D policies generally have level premiums. So the ability to vary payments is what makes universal life the policy with flexible premiums.