Which of the following actions is not possible with a Universal Life policy?

The selected answer is accurate because, in a Universal Life policy, premiums do not receive direct tax benefits merely by being paid. While life insurance policies in general may offer tax advantages in terms of death benefits being tax-free to beneficiaries, the premiums paid on Universal Life insurance do not qualify for a tax credit against income tax.

The other features of Universal Life policies allow for flexibility in premium payments and adjustments in cash value. The ability to pay premiums at unscheduled times and to use cash value for premium payments are significant benefits of these policies, reflecting their adaptable nature. Additionally, policyholders can adjust the face amount of their coverage depending on their current needs and financial situation, further highlighting the customizable aspect of Universal Life insurance. Therefore, the unique characteristic that prevents premium payments from being credited against income tax emphasizes an important distinction in how these financial products operate from a tax perspective.