Which statement best describes the difference between Whole Life and Universal Life insurance policies?

Whole Life and Universal Life insurance policies are distinct in their structure and benefits, particularly concerning flexibility. Universal Life insurance policies are designed to offer policyholders greater flexibility in terms of premium payments and the ability to adjust the death benefit. This means that within certain guidelines, policyholders can choose how much to pay in premiums each period, provided they meet the minimum required amount. Additionally, they can also increase or decrease the death benefit depending on their needs and financial situation over time.

Whole Life insurance, on the other hand, generally requires fixed premium payments for the duration of the policy and ensures a guaranteed death benefit, along with a cash value that accumulates over time at a set interest rate. This rigidity can be a drawback for those seeking adaptability in their insurance coverage.

The other options suggest features that do not accurately represent the key characteristics of these two types of life insurance. For instance, Whole Life policies do indeed build cash value, so the statement that only Whole Life accumulates cash value is incorrect. Furthermore, Universal Life policies do not require evidence of insurability for every premium payment after the initial underwriting, which cannot be exclusively attributed to one type over the other. Thus, the chosen answer articulates the core difference effectively, emphasizing the flexibility inherent in