Which statement correctly describes investment choices in Universal Life Insurance?

In Universal Life Insurance, policyholders are given a degree of flexibility regarding how their premiums are allocated among various investment options. This includes a selection of different investment types, which might encompass equities, bonds, cash accounts, and sometimes guaranteed investment accounts or funds. This flexibility allows policyholders to tailor their investment choices based on their individual risk tolerance, financial goals, and market conditions.

Having this variety means that individuals can diversify their investments, taking advantage of both growth-oriented resources and more stable, guaranteed options. This adaptability is a key feature of Universal Life Insurance, which aims to provide both life insurance coverage and potential cash value growth through investments.

The other statements do not accurately reflect the nature of Universal Life Insurance investment choices. There is no limitation to only government bonds, high-risk funds are not the only options available, and policyholders can usually change their investment options as desired, allowing for proactive management of their policy. This flexibility and choice are fundamental aspects of Universal Life Insurance, making it an appealing option for many consumers.