In which type of life insurance policy can the policy owner skip premium payments without the policy lapsing?

The ability to skip premium payments without causing the policy to lapse is a feature found in universal life insurance policies. This type of policy offers a flexible premium structure, allowing policy owners to pay less than the scheduled amount or even skip payments altogether, as long as there is enough cash value in the policy to cover the cost of insurance and any other charges.

Universal life policies accumulate cash value over time, which can be used to cover premium payments. If premium payments are skipped, the policy will not automatically lapse as long as there is adequate cash value available to support the policy's ongoing costs. This flexibility is particularly appealing to those who may not have a consistent cash flow or who want the ability to manage their premium payments according to their financial situation.

In contrast, term life insurance provides coverage for a specified period and does not accumulate cash value, meaning missed payments lead to policy cancellation. Whole life insurance typically requires fixed premium payments and does not allow for skipping without risk of lapse, while variable life insurance has a more complex structure based on the performance of investment sub-accounts, which would also require regular premium payments to maintain coverage.