Which of the following life insurance policies combines term insurance with an investment element?

The correct answer is Universal Life. This type of policy uniquely combines both term insurance components and an investment element. Specifically, Universal Life insurance provides a death benefit like traditional term life insurance but also includes a cash value component that can grow over time based on the performance of chosen investments.

Policyholders have the flexibility to adjust their premiums and death benefits, allowing them to increase or decrease coverage as their financial needs evolve. This flexibility and the investment feature are key characteristics that distinguish Universal Life from purely term life policies, which solely provide death benefits without any cash value accumulation or investment options.

Whole Life insurance, in contrast, also includes a savings or cash value component but is designed to provide coverage for the insured's entire life as long as premiums are paid. Variable Life insurance allows policyholders to allocate cash value to different investment options, but it operates with a more complex structure and varies in death benefits based on the performance of those investments. Term Life insurance, on the other hand, strictly offers coverage for a specified term without any investment feature or cash value accumulation. Therefore, Universal Life is the policy that best fits the criteria of combining both insurance coverage and an investment element.