What is an example of a universal life insurance policy?

A universal life insurance policy is characterized by its flexible premium structure and the ability to accumulate cash value based on interest rates. This option accurately describes how universal life insurance operates, allowing policyholders to adjust their premium payments and choose how their cash value is invested. The interest earned on this cash value can vary according to market conditions, which can enhance the growth of the cash value over time.

The other options describe different types of life insurance policies or features that do not fit the definition of universal life insurance. For instance, fixed premiums are a characteristic of whole life insurance rather than universal life. Similarly, policies that focus solely on accidental death do not offer the flexibility or cash value feature integral to universal life. Lastly, a standard term life policy inherently lacks cash value, as it is designed to provide coverage for a specific period without the investment component present in universal life insurance.