Which type of life insurance policy allows for flexible premiums and investment choices?

A universal life policy is designed to offer policyholders a combination of flexible premiums and the ability to choose how their cash value is invested. This type of insurance allows the policyholder to adjust the premium payments and the death benefit within certain limits, which can better align with their financial situation and goals.

The cash value that accrues in a universal life policy can earn interest based on a declared rate, and policyholders have the option to allocate their cash value among different investment accounts, which can potentially yield higher returns. This feature makes it appealing to individuals who want the security of life insurance while also being able to participate in investment strategies.

While other types of insurance like variable life policies also offer investment options, universal life policies are specifically noted for their flexible premium payments and simpler earnings structure compared to variable life, where returns depend more directly on the performance of chosen investments.