Correct Answer Explanation: c. Variable universal life

Variable universal life insurance is characterized by a flexible premium and death benefit, and it allows policyholders to have control over the investment aspect of the plan.

This type of insurance combines features of both variable life and universal life policies, providing the policyholder with the ability to invest the cash value portion of the policy in a variety of investment options, such as stocks, bonds, and mutual funds.

This means that the cash value can potentially grow at a faster rate compared to traditional universal life policies.

The flexibility in premium payments means that policyholders can adjust the amount they pay into the policy, within certain limits. They can also choose how to allocate the cash value among the different investment options offered by the insurance company.

Additionally, the death benefit in variable universal life insurance is tied to the performance of the underlying investments. This means that if the investments perform well, the death benefit can increase, offering the potential for higher payouts to beneficiaries.

Now, let’s discuss why the other options are not correct:

a. Variable Life:

Variable life insurance is characterized by an investment component where policyholders can allocate a portion of their premiums into various investment options. However, unlike variable universal life, the premium payments for variable life insurance are typically fixed.

This means that policyholders have less flexibility in adjusting the amount they pay into the policy. While the investment component can potentially lead to higher cash value growth, it doesn’t offer the same level of premium flexibility as variable universal life insurance.

b. Universal Life:

Universal life insurance provides policyholders with the flexibility to adjust their premium payments and death benefits within certain limits. However, the investment aspect of universal life policies is usually tied to a fixed or indexed interest rate. This means that the cash value grows at a predetermined rate set by the insurance company.

While policyholders have control over premium payments and death benefit amounts, they don’t have the same level of control and potential for higher returns through a variety of investments as offered by variable universal life insurance.

d. Adjustable Life:

In summary, variable universal life insurance stands out among the options listed as it combines the flexibility of premium payments and death benefits with the ability to control and potentially benefit from the investment aspect of the policy.

This combination makes it a versatile choice for individuals who are comfortable with managing investment options within their life insurance policy.

while variable life and universal life policies offer certain investment and premium flexibility, they do not provide the same level of control over the investment aspect and premium adjustments.  Variable universal life insurance, making it a unique and versatile option for policyholders seeking a dynamic approach to their life insurance coverage.