Which insurance policy allows for changes in coverage as needs fluctuate?

Universal life insurance is the correct answer because it is specifically designed to provide flexibility in terms of premium payments, death benefits, and cash value accumulation. This type of policy features adjustable premiums and allows policyholders to change their coverage amounts as their needs change over time. For instance, if an individual experiences a life event such as marriage, having children, or changing financial circumstances, they can increase or decrease the death benefit accordingly.

In addition to the death benefit adjustments, universal life insurance policies often have a cash value component that grows over time and can be accessed by the policyholder. This flexibility makes it a suitable option for those whose insurance needs may change as their lives progress.

The other policy types mentioned do not offer this same level of adaptability. Fixed life insurance typically provides a predetermined payout and does not allow adjustments; term life insurance covers a specific period with fixed terms and does not include cash value accumulation or flexibility in coverage; and whole life insurance offers a guaranteed death benefit and cash value, but the premiums and coverage are generally fixed throughout the life of the policy. Thus, universal life insurance stands out for its unique ability to adjust to changing needs.