Final answer:
A life insurance policy that is subject to a contract interest rate is referred to as universal life insurance. Universal life insurance offers flexibility in premium payments and death benefit, as well as the potential for accumulating cash value.
Step-by-step explanation:
A life insurance policy that is subject to a contract interest rate is referred to as universal life insurance.Universal life insurance is a type of cash-value life insurance that offers flexibility in premium payments and death benefit, as well as the potential for accumulating cash value. It allows the policyholder to adjust the death benefit and premium payments to suit their needs, within certain limits set by the contract.For example, if the policyholder wants to increase their death benefit, they can do so by paying higher premiums. Conversely, if they want to reduce the death benefit or skip premium payments for a period, they have the option to do that as well.