Which type of life insurance often allows for the flexibility of changing premiums?

Universal life insurance is characterized by its flexibility in changing premiums. This type of policy combines elements of both term and whole life insurance, providing not only a death benefit but also a cash value component that can grow over time. One of the key features of universal life insurance is that it allows policyholders to adjust their premium payments and death benefit amounts according to their current financial situation and needs.

For instance, in a given year, if a policyholder has a surplus of cash, they can opt to pay a higher premium to increase the cash value accumulation. On the other hand, during a financially tighter situation, they can reduce the premium payment, as long as certain minimums are met, without losing the coverage altogether. This flexibility makes universal life insurance an appealing option for those who desire the ability to tailor their policy as their life circumstances change.

In contrast, term life insurance typically requires that the premiums be paid at set levels and does not have a cash value component, while whole life insurance has fixed premiums and guaranteed cash value growth. Accidental death insurance only provides benefits in the event of an accidental death and does not offer the same complexities or features as other types of life insurance.