Which of the following is true regarding universal life insurance?

Universal life insurance is characterized by its flexibility, which is a defining feature of this type of policy. Policyholders have the ability to adjust their premium payments and choose the coverage amount within certain limits. This flexibility allows them to tailor the policy to their financial situations and needs over time.

For instance, if a policyholder encounters financial difficulties, they can reduce their premium payments, and if their financial situation improves, they can increase their payments as well. Additionally, the death benefit can also be adjusted, offering both the policyholder and their beneficiaries options that align with their needs.

This flexibility is contrasted with other life insurance types, such as whole life insurance, which typically features fixed premiums and benefits, thereby providing less adaptability to changing financial circumstances. Universal life insurance also builds cash value through a savings component, which can be accessed by the policyholder while the policy is in force, further reinforcing its adaptable nature.