A universal life insurance policy is best described as what?

A universal life insurance policy is best described as an annually renewable term policy with a cash value account. This type of policy is unique because it combines features of both term and permanent insurance. Universal life allows the policyholder to adjust their premium payments and death benefit amounts, providing flexibility that is not typically available with traditional whole life insurance. The cash value component grows over time and can be accessed by the policyholder, making it a versatile financial tool that responds to changing needs.

While the other options present characteristics of different policy types, they don't capture the key elements of universal life insurance. For instance, fixed premium policies typically have a predetermined premium that does not vary, while universal life allows for premium adjustments. A whole life policy provides guaranteed benefits and fixed premiums but lacks the flexibility of an adjustable premium structure. An adjustable life policy offers some flexibility, but it generally does not provide the same cash value features in conjunction with a term component that universal life does. This explanation helps clarify why option B accurately reflects the nature of universal life insurance.