Final answer:
The feature of a life policy that allows the insured to change premium payments, depending on the policy value and the current financial needs of the policyholder, is known as flexible premium.
Step-by-step explanation:
The feature of a life policy that allows the insured to change premium payments, depending on the policy value and the current financial needs of the policyholder, is known as flexible premium.
Flexible premium is a payment option that gives the policyholder the flexibility to adjust the premium amount within certain limits. This feature is commonly found in cash-value (whole) life insurance policies. The policyholder has the ability to increase or decrease the premium payments based on their financial circumstances.
For example, if the policyholder is facing financial difficulties, they can choose to reduce the premium payments for a certain period of time. Conversely, if their financial situation improves or they want to accumulate more cash value in the policy, they can increase the premium payments. The flexibility of flexible premium allows the policyholder to adapt the policy to their changing financial needs.