Which life insurance option allows policyholders to change premium payments and death benefits?

Universal life insurance offers policyholders the flexibility to adjust both premium payments and death benefits over time. This unique feature allows individuals to adapt their insurance coverage to their changing financial needs or priorities. For example, if a policyholder experiences a temporary financial setback, they can choose to reduce their premium payments, or if they find themselves in a better financial situation, they can increase their premium payments or adjust the death benefit accordingly.

The policy is designed to accumulate cash value based on a declared interest rate, which also allows the policyholder to take out loans against this cash value or use it to pay premiums. This combination of flexibility in premium payments and the ability to modify the death benefit is what distinguishes universal life insurance from other types of life insurance products, such as whole life, term life, and variable life insurance, which do not offer the same level of adjustability.