What is the name of a universal life policy that includes an investment component?

The correct answer is variable universal life because this type of policy combines the flexible premiums and adjustable death benefit features of universal life insurance with the investment component found in variable life insurance. In a variable universal life policy, policyholders can allocate their premium payments among a variety of investment options, such as stocks, bonds, or mutual funds. The cash value, depending on the performance of these investments, can grow over time, potentially leading to greater returns compared to traditional whole life or universal life policies that typically offer a guaranteed interest rate.

This investment component also introduces an element of risk, as the cash value and potentially the death benefit can fluctuate based on the performance of the chosen investment options. Therefore, policyholders have a degree of control over the growth of their policy, which makes variable universal life a popular choice for individuals seeking both life insurance protection and investment opportunities.