What characterizes a Universal Life insurance policy?

A Universal Life insurance policy is primarily characterized by its flexibility in premium payments and the ability to adjust the face amount based on the policy's cash value. This type of insurance offers the policyholder the option to modify the premium amounts they pay, allowing them to either pay more during financially stable times or less when money is tight. Additionally, as the cash value of the policy grows, the policyholder can decide to increase or decrease the death benefit, depending on their needs and financial goals.

This flexibility in both premium payment and death benefit is a significant advantage of Universal Life policies compared to more traditional life insurance products, which typically feature fixed premiums and benefits that do not change over the life of the policy. Thus, the answer emphasizing the flexibility of premiums and the adjustability of the face amount accurately reflects the defining traits of Universal Life insurance.