Which policy type is backed by equity investments and allows the policyholder to adjust the death benefit?

The policy type that is backed by equity investments and allows the policyholder to adjust the death benefit is variable universal life insurance. This type of policy combines features of both universal life insurance and variable life insurance.

With variable universal life insurance, policyholders can invest the cash value in various separate accounts, similar to mutual funds, which can lead to higher potential returns. The equity investments provide a way for the cash value to grow based on market performance. Furthermore, this policy gives the policyholder flexibility in adjusting both the premium payments and the death benefit amount. This adaptiveness can be beneficial as it allows individuals to tailor their coverage and savings according to their changing financial needs and goals over time.

In contrast, whole life insurance generally provides a fixed death benefit and a guaranteed cash value but does not allow for adjustments in the same way variable universal life does. Term life insurance is focused solely on providing death benefit protection for a specified period without any cash value accumulation or investment options. Finally, final expense insurance is designed to cover end-of-life expenses and typically has a fixed benefit amount, with no investment or flexibility features.