How it works · Universal Life Insurance
Permanent coverage that can adjust as life changes.
Universal life (UL) is permanent insurance with more flexibility than whole life. Within policy limits, you may be able to adjust how much you pay and how much coverage you carry as your income, family, and goals change over time.
Coverage lengthPermanent, if funded
Cash valueInterest-credited
PremiumsFlexible
How it works
- Premiums go into a cash-value account; the cost of insurance and policy fees are deducted each month.
- The cash value earns interest based on a rate set by the carrier, usually with a guaranteed minimum.
- You may be able to pay more in good years and less in tighter years, as long as the cash value covers policy costs.
- Some UL policies offer a "no-lapse guarantee" that keeps coverage in force if required premiums are paid.
Often a good fit for
- People who want permanent coverage at a lower cost than whole life
- Those whose income varies from year to year
- Estate planning needs where coverage must last
- People who want the option to change their death benefit later
Things to consider
Flexibility requires attention. Underfunding the policy, or lower-than-expected interest rates, can cause it to lapse. Reviewing your policy regularly is important.