PSI Ohio Insurance Practice Exam 2025 - Free Ohio Insurance Practice Questions and Study Guide

The correct answer is universal life insurance. This type of policy is designed to provide flexible premiums and death benefits while also accumulating cash value over time, which the policyholder can access. The cash value component is significant because it allows policyholders to take withdrawals or loans against the accumulated cash value.

In contrast, term life insurance does not build cash value; it only provides coverage for a specified period. Whole life insurance does accumulate cash value, but it typically has more rigid premium payments and death benefits compared to universal life. Limited pay life insurance also builds cash value, but it involves paying premiums for a limited number of years rather than offering the same flexible structure as universal life insurance. Thus, universal life insurance stands out for its capacity to allow policyholders to withdraw funds from their cash value.