What does universal life insurance provide in terms of premiums?

Universal life insurance is designed to offer policyholders flexibility in terms of premium payments. Unlike traditional life insurance policies that often require fixed premiums, universal life insurance allows policyholders to adjust the amount and frequency of premium payments. This means that individuals can pay higher premiums when they can afford to do so and lower premiums when necessary, as long as they meet the minimum premium requirements to keep the policy in force. This flexibility can be particularly appealing to those who may have varying financial situations over time, as it allows for better management of cash flow while maintaining life insurance coverage.

The other options do not accurately reflect the nature of universal life insurance. Static premiums suggest no changes are allowed, which is not true for this type of policy. Annually increasing premiums imply a predetermined increase, which is not a feature of universal life insurance. Lastly, a one-time payment premium does not align with how universal life policies operate since they typically require ongoing premium contributions to maintain the policy's benefits.