Which policy combines the flexibility of a universal life policy with investment options?

The variable universal life policy effectively combines the flexibility of a universal life insurance policy with a variety of investment options. This type of policy allows policyholders to adjust their premiums and death benefit amounts, similar to universal life. However, what sets variable universal life apart is the ability to allocate the cash value into different investment sub-accounts, which can include stocks, bonds, or mutual funds. This feature enables policyholders to potentially enhance their cash value and death benefit through market performance, providing both insurance coverage and an investment vehicle.

In contrast, other policies mentioned do not offer the same mix of features. An adjustable universal life policy offers some flexibility in terms of premium and death benefit adjustments, but it does not include investment options. A flexible universal life policy is essentially another term for universal life, emphasizing flexibility without incorporating investment choices. A modified universal life policy typically focuses on a lower premium at the start, which later increases, but it does not provide the investment component found in variable universal life policies. Thus, variable universal life distinctly meets the criteria of blending flexibility with investment opportunities.