Final answer:
The insurance companies can offer policy owners of Universal Life Insurance the choice between fixed or variable premiums. A fixed premium remains constant, whereas a variable premium can be adjusted based on several factors. Universal Life Insurance's flexibility in premiums is a key feature that separates it from other life insurance policies.
Step-by-step explanation:
In the context of Universal Life Insurance, the insurance companies may give policy owners the option to pay either fixed or variable premiums. A fixed premium is a set amount that does not change over time, while a variable premium allows flexibility and can be adjusted based on several factors such as the performance of the investment component of the policy, current market conditions, and the evolving needs of the policyholder.
Adaptable premiums are crucial in insurance to maintain the balance between what is paid out to insured individuals and what is received in premiums. As policyholders' circumstances change, their insurance needs may also evolve, which is why universal life insurance can be beneficial with its adjustable premium feature.