Conquer the West Virginia Life Insurance Exam 2025 – Unlock Your Future Success!

The correct answer is C, Universal Life. This type of policy is designed with flexibility in mind, allowing for adjustments in both premium payments and death benefits. Universal Life insurance features a cash value component that can fluctuate over time based on various factors, including changes in mortality costs, interest rates, and administrative expenses.

Unlike Whole Life insurance, which provides guaranteed cash value growth and fixed premiums for the life of the policy, Universal Life enables policyholders to make alterations to their premium payments and adjust the death benefit as their financial situation changes. Specifically, if the insurance company adjusts its cost of insurance (COI) rates based on the insured's age or mortality statistics, that can impact the cash value and the overall policy performance.

This flexibility distinguishes Universal Life from Term Life and Group Life policies, which do not have a cash value component or the same level of policy customization. In Term Life, coverage is temporary and does not accumulate cash value, while Group Life typically offers basic life insurance benefits as part of an employee benefits plan without the individual savings element.