Which type of policy allows the policy owner to skip premium payments if there is enough cash value to cover the premium?

The type of policy that allows the policy owner to skip premium payments if there is sufficient cash value is Universal Life insurance. This policy features flexible premium payments and built-up cash value, which can be utilized to pay the premium.

With Universal Life, the policy owner can adjust the amount and frequency of premium payments, and any accumulated cash value can be used to cover future premiums if needed. This flexibility is one of the defining characteristics of Universal Life insurance, making it distinct from other types of life insurance policies. Whole Life policies, while they do build cash value, typically require fixed premiums for the life of the policy and do not provide this level of flexibility. Term Life policies generally do not accumulate cash value at all, and Variable Life policies allow policyholders to allocate cash value among a variety of investments but still usually require regular premium payments. Thus, Universal Life is the only option in this context that allows for the possibility of skipping payments based on accumulated cash value.