South Carolina Life Insurance Practice Exam 2026 - Free Life Insurance Practice Questions and Study Guide

The type of policy that allows policyholders to adjust premiums and death benefits is universal life insurance. This flexibility is one of the defining features of universal life policies.

Universal life insurance combines life coverage with an investment savings element. Policyholders can vary their premium payments and choose how much of their premium goes toward the death benefit and how much goes into the investment component, which typically accumulates cash value. This adaptability allows individuals to respond to changing financial situations and goals over time.

Other types of policies do not provide this level of flexibility. For instance, straight life and traditional whole life policies generally come with fixed premiums and death benefits, delivering consistent coverage without the ability to modify these amounts as financial needs change. Term life insurance also does not allow for adjustments to premiums or benefits during the policy’s term since it is typically designed for a fixed period with a predetermined death benefit.