If a life insurance policy with a face amount of $300,000 accumulates a cash value of $50,000 and increases to $350,000, what type of policy is it?

The correct answer is Universal Life policy because this type of policy is designed to offer flexible premiums, adjustable death benefits, and the ability to accumulate cash value over time. In the scenario provided, the life insurance policy has a face amount that not only has a cash value of $50,000 but also increases to $350,000, indicating that the death benefit can be adjusted. Universal Life policies are particularly known for their capacity to allow policyholders to change their death benefit amounts and premium payments as their needs change, which aligns with the scenario described.

Other policy types have specific characteristics that don't match this flexibility. An Increasing Term Life policy typically only provides increasing death benefits over time without accumulating cash value. A Nonparticipating policy does not share dividends with the policyholder and tends to have a fixed death benefit with no cash accumulation. A Modified Whole Life policy generally has a lower premium in the early years and adjusts after a set time frame, but it does not illustrate the same level of cash value increase and flexibility with death benefits as a Universal Life policy.