Which type of policy allows for a buy-back facility?

The combined life assurance and critical illness policy is the correct answer because it incorporates features from both types of coverage, allowing for a buy-back facility. This means that if a critical illness occurs, the policyholder can receive a benefit while still maintaining some level of life cover.

A buy-back facility enables policyholders to continue their life cover after making a claim under the critical illness portion of their policy, providing flexibility and financial security. This dual protection can be particularly beneficial, as it allows for both critical illness coverage and life assurance in a single policy, accommodating the differing needs of the insured.

In contrast, a critical illness policy on its own typically does not offer this facility, as it is focused solely on critical illness protection without the integrated life assurance component. Basic term assurance policies are designed solely for providing a death benefit over a specific period and do not offer a buy-back facility. Whole life assurance policies provide lifelong coverage and accumulate cash value but usually do not include a built-in critical illness feature or buy-back option. Thus, the combined life assurance and critical illness policy stands out for its unique ability to offer a buy-back facility, making it a comprehensive choice for policyholders seeking both protections.