What characteristic distinguishes a universal life insurance policy?

A universal life insurance policy is specifically designed to offer flexible premium payments, which is a defining characteristic of this type of policy. This flexibility allows policyholders to adjust the amount and frequency of their premium payments, as long as they maintain sufficient funds to cover the cost of insurance and other policy charges. This adaptability is particularly advantageous for individuals whose financial situations may vary over time, as it allows them to manage their life insurance coverage according to their current financial capabilities.

In contrast, the other options reflect traits associated with different types of insurance policies. Fixed premium payments are typically seen in whole life policies, where the premium amount remains constant throughout the life of the policy. Guaranteed cash value growth is more characteristic of whole life insurance, which builds cash value at a predictable rate. Exclusively term coverage refers to term life insurance, which provides coverage for a specified term without any cash value component, unlike universal life policies that incorporate both a death benefit and cash value accumulation.