Adjustable Life Policy is a hybrid of term life and whole life that allows policyholders the option to adjust policy features, including the period of protection, face amount, premiums, and length of the premium payment period. Adjustable life policies also incorporate an interest-bearing savings component, known as a cash value account. Which option best describes this policy?

• A. A pure term policy with no cash value
• B. A hybrid of term life and whole life with adjustable features and a cash value account
• C. A universal life policy with investment options
• D. A savings account only

Answer: (B)

A policy that blends term life and whole life features, with the ability to adjust the protection period, face amount, premiums, and premium-payment period, and that also builds cash value, is describing an adjustable life policy. This type is specifically positioned as a hybrid that combines term-like flexibility with the cash value component of permanent life insurance. The description that it is a hybrid of term life and whole life with adjustable features and a cash value account best captures its nature.

The other options don’t fit because: a pure term policy has no cash value; a universal life policy is a different product with its own structure of flexible premiums and interest credits (not described here as adjustable life); and a savings account only has no life insurance protection component.