Universal Life Insurance

 

Universal Life Insurance is a type of life insurance policy that allows the policyholder to adjust the policy in response to life changes.  It offers flexibility with regard to premium, payment, and use of savings and insurance benefits.

Unlike whole life insurance, universal life insurance premiums and savings interest rates are variable from month to month.  For this reason, universal life policyholders have the option to pay their premiums using interest from the associated savings account.  However, fluctuations in interest rates and policy premiums pose a risk to policyholders not present in basic whole life insurance.

Universal life insurance allows the policyholder to tailor the policy to his individual circumstances at any stage in life.  However, universal life insurance policies do carry higher risk with regard to fluctuations in insurance premiums and interest rates.