Final answer:
A Universal Life Insurance policy is an example of a fixed interest sensitive insurance product with flexible premiums, offering policyholders adjustable payment options and a savings component growing at a predetermined interest rate.
Step-by-step explanation:
An example of a fixed interest sensitive insurance product with flexible premiums is a Universal Life Insurance policy. Universal Life Insurance offers flexibility in the premium payments, where policyholders can adjust the amount and frequency of their premiums within certain limits. Additionally, the savings element of these policies grows at a fixed interest rate determined by the insurance provider. This aspect of the policy is 'interest sensitive' because the accumulated cash value will be affected by changes in interest rates set by the insurance company, reflecting current market conditions.
Insurance serves as a method to safeguard households and firms from financially crippling events. Premiums are calculated based on the likelihood of certain events, and those who experience losses receive compensation. Life insurance is specifically designed to provide financial support to the insured's family after death, and when it comes with flexible premiums and a savings component that accrues interest, it offers both protection and investment benefits.