What type of life insurance policy allows for adjustments in premiums based on the insurer’s experience?

The correct choice, interest-sensitive whole life insurance, is accurate because this type of policy is designed to allow for flexibility in premium payments and the cash value component based on the insurer's experience and investment performance. Unlike traditional whole life insurance, which has fixed premiums and guaranteed cash value growth, interest-sensitive whole life policies can adjust premiums and benefits based on current interest rates and the company’s performance. This means that if the insurer has a good year financially or can earn higher returns on the cash value, the premiums may decrease or increase accordingly, providing policyholders with some control and responsiveness to changing market conditions.

In contrast, term life insurance does not accumulate cash value and provides a death benefit for a specified period, which makes it unrelated to the insurer's performance in terms of premium adjustments. Universal life insurance offers some flexibility, but it typically allows policyholders to adjust the death benefit and premiums as needed rather than being directly tied to the insurer's experience. Traditional whole life insurance has a fixed premium and guaranteed cash growth, which does not change based on the insurer’s performance, making it less versatile compared to interest-sensitive whole life.