Final answer:
The Variable Universal Policy is a life insurance type that allows for flexible premiums, a flexible death benefit, and investment choice for the cash value, suitable for individuals who are comfortable with investment risks and seeking financial flexibility.
Step-by-step explanation:
The type of life insurance that offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested is the Variable Universal Policy. This policy is designed to provide the policyholder with the flexibility to adjust premium payments and death benefits as their financial circumstances or insurance needs change. Moreover, it allows policyholders to invest the cash value of their policy in various investment options, typically including stocks, bonds, and money market funds, which has the potential to grow the cash value depending on the performance of the investments chosen.It is important to note that with higher potential returns comes increased risk, as the cash value of the policy can fluctuate based on the underlying investment performance. Due to this risk, the variable universal policy is a good fit for individuals who have a more aggressive investment stance and are comfortable with potential market volatility. They provide a level of control and flexibility that is not available with more traditional policies, such as whole life or term life insurance.As with any life insurance policy, it is crucial to carefully consider one's own financial situation, risk tolerance, and insurance needs before choosing a variable universal policy.