What flexibility does the policyowner have with a universal life insurance policy?

The flexibility of a universal life insurance policy allows the policyowner to adjust the premium amounts paid into the policy. This means that the policyowner can choose to increase or decrease the premium payments according to their financial situation or needs at any given time. The adjustable nature of the premiums is a key feature of universal life insurance, differentiating it from other types of policies which often require fixed premiums.

This flexibility enables policyowners to maintain coverage while accommodating changes in their financial circumstances, such as a raise or a temporary loss of income. Additionally, if the policyowner wants to make larger contributions to build cash value more quickly, they can do so by increasing the premium payments. Conversely, if they need to reduce expenses, they can lower the premium payments as well, as long as they continue to meet the minimum premium requirement to maintain the policy in force.

The other options suggest a lack of flexibility, which does not align with the nature of universal life insurance. The requirement for a fixed premium or limitations on premium adjustments are characteristics of other types of life insurance policies, such as whole life insurance. Therefore, the ability to adjust premium payments freely is a distinctive and advantageous feature of universal life insurance.