Which life insurance type is most likely to suit someone with uncertain cash flow?

Universal life insurance is particularly suited for individuals with uncertain cash flow because it offers flexibility in premium payments. Policyholders can adjust their premium amounts and payment frequency according to their financial situation, which is advantageous for someone whose income may fluctuate. This type of policy combines a death benefit with a cash value component that grows based on interest rates, allowing the insured to manage both the coverage amount and the cost of insurance as needed.

In contrast, term life insurance requires consistent premium payments over a specified period, which may not align well with inconsistent cash flow. Whole life insurance also necessitates fixed premium payments and provides a guaranteed cash value growth, making it less flexible compared to universal life. Variable life insurance involves the risk of investment performance tied to the cash value, which may not be suitable for someone who needs predictable costs amidst variable income. Thus, universal life insurance specifically addresses the need for adaptable financial commitments while providing life coverage.