Which insurance policy primarily invests premiums in a cash value account that earns competitive interest?

Universal Life Insurance is the correct answer because it is designed to accumulate cash value through the premiums paid, which are then invested in a cash value account. This cash value earns interest at a competitive rate, which can vary based on the insurer's performance and prevailing market rates. The policyholder has the flexibility to adjust premium payments and death benefits, which allows for a more customized investment approach compared to other types of life insurance products.

In contrast, Variable Life Insurance allows policyholders to invest the cash value in various investment options, such as stocks and bonds. While this can lead to potentially higher returns, it also comes with the risk of losing cash value depending on market performance, making it different from the more stable income option of a cash value account that Universal Life Insurance offers.

Modified Whole Life typically combines elements of whole life and term insurance, but it does not focus primarily on a cash value account that earns competitive interest like Universal Life does. Instead, it may have a lower initial premium that adjusts later.

Life Paid Up at 65 refers to a permanent life insurance policy that is fully paid up by age 65. While it does accumulate cash value, the focus isn’t specifically on the cash value earning competitive interest over time, which makes Universal Life the