Which life insurance policy combines a term insurance component with an investment element?

The choice of Universal Life Insurance is correct because it uniquely combines both a term insurance component and a cash value or investment element. Universal life insurance allows policyholders to have flexible premiums and death benefit amounts, which can vary according to their needs and the performance of the investment component. This type of policy provides both the protection of life insurance and the opportunity to accumulate cash value over time, which can be invested in various ways to potentially grow the policy's value.

Whole Life Insurance, on the other hand, has fixed premiums and offers guaranteed cash value growth but does not feature the same level of flexibility in premiums or death benefit amounts as Universal Life. Term Life Insurance strictly provides death benefit protection without any cash value accumulation or investment component. Variable Life Insurance includes an investment component but differs from universal life in that the cash value can fluctuate based on investment performance, which carries more risk. Thus, Universal Life specifically stands out as the option that clearly integrates both term insurance and an investment element in a balanced manner, offering flexibility and growth potential.