What typically happens to the premiums in a universal life insurance policy?

In a universal life insurance policy, one of the key features is the flexibility it offers in premium payments. Policyholders are allowed to adjust their premium payments based on their current financial circumstances. This means that they can increase or decrease their payments within certain limits, reflecting changes in their budget or financial needs. This flexibility makes universal life insurance an attractive option for individuals who may experience fluctuations in income or expenses over time.

In distinguishing this from other types of life insurance policies, such as term life insurance or whole life insurance, universal life allows for the premium structure to be more dynamic rather than fixed. Therefore, the ability to adjust payments as needed is a defining aspect of universal life insurance, leading to the choice that emphasizes this feature as the correct answer.