What type of life insurance policy likely allows the insured to withdraw cash value to pay medical bills?

The correct choice is universal life insurance. This type of policy is designed with flexibility, particularly in premium payments and the ability to build cash value over time. As the insured makes premium payments, a portion goes towards the cash value component of the policy. This cash value can be accessed through withdrawals or loans, making it available for various needs, including paying medical bills.

Universal life insurance also provides the advantage of not being tied to a set schedule for premium payments, giving policyholders the ability to adjust their contributions based on their financial situation. This flexibility, combined with the ability to accumulate cash value, makes it a suitable option for individuals who might need to tap into the cash value to cover unexpected expenses such as medical bills.

In contrast, term life insurance primarily offers death benefit protection for a specified period without any cash value accumulation, whole life insurance provides guaranteed cash value but with less flexibility in premium payments and access compared to universal life, and accidental death policies offer benefits only in the event of death due to an accident without any cash value feature.