Universal Life Insurance

Understanding Your Universal Life Insurance Policy

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For some people, flexibility is the key to financial security. If you're one of them, you probably believe that as your needs change, your life insurance coverage should change, too.

Universal life insurance offers a combination of flexible premiums, access to cash value and the possibility of flexible, lifelong coverage. If an increased level of control is important to your family's financial security, then universal life may be the right choice for you.

Flexible premiums

As with every life insurance policy, the universal life policyholder pays premiums. From each premium payment, the insurer collects a stated percentage to cover expenses and the cost of insurance. The remaining amount is then applied to the policy's cash value. This cash value is then credited with monthly interest.

This is where the possibility of a flexible premium arises. Over time, the policy develops a cash value that can be used to offset part of a premium or skip premium payments altogether, subject to policy conditions and minimums. This flexibility gives you the ability to respond to opportunities or disruptions in your financial situation without having to restructure or repurchase your life insurance policy.

Flexible death benefit

Another advantage of universal life is the ability to increase or decrease the amount of coverage within certain guidelines. This occurs in two ways.

Increasing your coverage- Over time you may find that your permanent life insurance needs have changed, such as the purchase of a larger home, or the addition of another child. Universal Life, allows you the possibility of increasing your coverage without purchasing a new policy. Typically, additional premium would be needed to keep the policy in force of your lifetime.

Decreasing your coverage- As your financial responsibilities change, Universal Life allows you to decrease your coverage without purchasing a new policy. The amount of the decrease is up to you, as long as it is within certain guidelines.


Universal life offers the possibility of a lifetime benefit and a guaranteed rate of return on cash value, with the flexibility of premiums and death benefits. For more information about whether universal life is right for you, discuss your needs with an insurance professional.


Because insurance protection is a contract, any coverage descriptions in this article are general only and are not statements of contract. All coverages are subject to all policy provisions, including applicable endorsements.