Which of the following statements is accurate regarding the flexible premium feature of universal life insurance?

The flexible premium feature of universal life insurance is designed to provide policyholders with the flexibility to adjust their premium payments based on their financial situation and changing needs. This means that policyholders can both increase or decrease the amount they contribute, or even skip payments altogether, as long as there is sufficient cash value to cover the cost of insurance and any policy expenses. This adaptability is a significant advantage of universal life insurance, making it suitable for individuals who may experience fluctuations in their income or financial obligations.

In contrast, the first option, which suggests that it only allows fixed premium payments, does not align with the core concept of flexibility offered by this type of policy. Similarly, while universal life insurance can provide the potential for cash value growth, it does not inherently guarantee policy dividends, which is a characteristic more associated with whole life insurance. Lastly, the idea that it restricts cash value growth is misleading, as universal life insurance typically provides opportunities for cash value accumulation based on the premiums paid and the credited interest rates. Therefore, the accurate understanding of the flexible premium feature is encapsulated in its ability to permit changes in premium amounts.