What characterizes a combination policy?

A combination policy is characterized by its ability to provide both permanent and temporary coverage. This structure allows policyholders to benefit from the advantages of both types of insurance. Permanent coverage typically offers lifetime protection and may include a cash value component, while temporary coverage, such as term insurance, is designed to provide protection for a specified period at a lower initial cost. By integrating these two types, a combination policy can cater to various financial needs and life stages throughout an individual's lifetime.

This dual nature means that policyholders can ensure that their immediate life insurance needs are met while also building long-term financial security through permanent coverage. This flexibility makes combination policies appealing for individuals who seek to blend different aspects of life insurance to match their personal circumstances. The other options do not accurately capture the essence of combination policies: they may focus solely on group versus individual offerings or suggest inflexibility, which doesn't align with the versatile nature of combination policies.