What type of insurance policy has the least flexibility in terms of loans and withdrawals?

The type of insurance policy with the least flexibility in terms of loans and withdrawals is term life insurance. Term life insurance is designed to provide coverage for a specific period, typically ranging from one to thirty years. It does not accrue cash value like other types of permanent insurance, such as whole life or universal life. Because term life is essentially pure life insurance, it does not allow for loans or withdrawals against the policy, which makes it inflexible in this aspect.

In contrast, whole life and universal life insurance policies build cash value over time. These policies allow policyholders to take loans against the accumulated cash value or make withdrawals, providing more financial flexibility. Variable life insurance, while also a permanent policy and having cash value, introduces investment choices that can affect the cash value and death benefit. However, unlike term life, both whole life and universal life allow for loans and withdrawals, showcasing their increased flexibility compared to term life insurance.