Final answer:
A universal life policy is different from a whole life policy because it offers a flexible premium schedule, allowing policyholders to adjust their payments, while whole life policy premiums are fixed. Option B is correct.
Step-by-step explanation:
The primary feature that differentiates a universal life policy from a whole life policy is a flexible premium schedule. Unlike whole life policies that have fixed premiums, universal life insurance offers the flexibility to adjust the amount and frequency of premium payments. This allows policyholders to increase or decrease their premiums within certain limits, which can be beneficial depending on financial circumstances.
Both types of policies have a death benefit and the ability to accumulate cash value over time. The cash value in these policies can be used as a financial account that can be borrowed against. Loans taken against a life insurance policy's cash value must be repaid with interest, and if not repaid, it can reduce the death benefit.
It's important to note that while both policies allow for policy loans, this feature is not what distinguishes a universal life policy from a whole life policy; rather, it is the payment flexibility that sets them apart.