Final answer:
Variable Universal Life insurance is the best option for flexible premium payments and possibly outpacing inflation, as it allows investment of the policy's cash value.
Step-by-step explanation:
The life insurance policy that should be recommended to someone who is seeking flexible premium payments and the potential for the interest rate to outpace inflation is Variable Universal Life (C). This type of policy combines the aspects of permanent life insurance with the ability to adjust premiums and allocate cash value amounts to various investment options. The cash values can fluctuate based on the performance of the chosen investments, which may exceed the inflation rate if well managed. However, there is also the risk that the investments could perform poorly, potentially reducing the cash value.
Term Life (A) insurance provides coverage for a specific period and does not accumulate cash value. Straight Whole Life (B) insurance provides a death benefit and accumulates cash value with fixed premium payments. Variable Whole Life (D) combines Whole Life coverage with an investment component, but premium payments are generally not flexible.