Which of the following statements about variable universal life policies is true?

Variable universal life policies are designed to offer policyholders a combination of flexible premium payments and a cash value component that can be invested in various investment options. The key feature of these policies is that they allow policyholders to choose how to allocate the cash value among a variety of investment options, such as stock funds, bond funds, or money market funds. This flexibility in investment allocation enables policyholders to potentially grow their cash value over time based on market performance, making the option related to allocation of cash value true.

The other options do not accurately represent the characteristics of variable universal life insurance. For instance, these policies do not offer fixed interest rates; instead, the cash value depends on the performance of the selected investments. Additionally, they come with multiple death benefit options that can be adjusted according to the policyholder's needs. Finally, variable universal life policies allow for adjustments, including changes in premium payments and death benefits, making them distinct and flexible compared to more traditional life insurance products.