Which statement best describes the overall philosophy of Universal Life Insurance?

Universal Life Insurance is built on the principle of flexibility and a combination of life insurance coverage with an investment component. This product allows policyholders to tailor their premiums and death benefits according to their financial goals and needs.

The idea of buying term insurance and investing the difference is closely aligned with the philosophy of Universal Life. It emphasizes the importance of managing and potentially growing cash value through investment decisions. In a Universal Life policy, the cash value can be invested in various accounts, and policyholders have control over how their funds are allocated, including the option to take advantage of market growth through investments, which can lead to higher returns over time.

This philosophy acknowledges that individuals may prefer to have lower initial costs (as seen in term insurance) and use the funds they save from not purchasing whole life insurance to invest elsewhere, which can potentially provide better growth than the guaranteed cash value provided by whole life policies.

Other options suggest buying whole life for guaranteed security, investing heavily in stocks, or focusing solely on low premiums, which do not fully encapsulate the flexible investment and insurance mix integral to Universal Life Insurance's philosophy. These alternatives lack the customizable and investment-centric aspects that are crucial in Universal Life policies, making option B the most representative choice.