What type of insurance policy has lower premiums but fluctuating values?

A universal life policy features lower premiums compared to whole life policies while also offering flexible premium payments and death benefits. The key characteristic of universal life insurance is that it is designed with a cash value component that earns interest; however, the growth of that cash value can fluctuate based on the performance of the underlying investment options chosen by the policyholder. This can lead to variations in the cash value and the total death benefit over time.

In contrast, fixed annuities offer guaranteed interest rates and stable values, making them less variable. Credit life insurance is typically designed to pay off a specific debt upon the insured's death and does not fluctuate in value. Term life insurance provides coverage for a specified term with premiums that remain level, but it does not have a cash value component that can fluctuate. Thus, the unique characteristic of universal life insurance aligns perfectly with the description of having lower premiums combined with fluctuating values.