Universal life insurance is permanent life insurance. It is designed to last your lifetime2 and to help you provide support for your beneficiaries after you die. It comes with more flexibility than whole life insurance, because you can make changes to the premium you want to pay, the timing of your payments, and your death benefit while your policy is in effect.

Key features of universal life insurance:

• Flexible premiums
• Ability to accumulate cash value that earns interest, generally tax-deferred3
• You can access the cash value during your lifetime for any reason, generally income-tax free4
• Your policy lasts your lifetime (as long as sufficient premiums are paid)
• Your policy pays your beneficiaries a lump sum that is generally tax-free, known as the death benefit
• You can choose whether the death benefit is a fixed amount or increases with your policy’s cash value

Universal life insurance provides a death benefit and can accumulate cash value —and offer more flexibility than other permanent policies. The amount and length of time you choose to pay your premium determines how much cash value your policy can accumulate. When you make a premium payment, most of that payment is allocated to your policy’s cash value. Then, the cost of keeping the policy in force is subtracted from that cash value every month. In addition, there are different types of universal life products that can offer increased growth potential, including options tied to the market. You may be able to increase the death benefit, and you may be able to lower or even stop your premium payments in the future if the policy has accumulated sufficient cash value.

The monthly cost of keeping a universal life policy in force depends, in part, on your age (as you get older, the cost of insurance goes up), your health, whether you smoke, and the size of the death benefit you want. But that cost is internal to the policy, it’s not something you pay directly. You choose how much premium to pay, within contract limits. You can choose to pay more than the policy costs today and build cash value that can help cover the cost of the policy later. If you have sufficient cash value already, you can choose to pay less than the cost of the policy or even not pay for a while.

Because universal life insurance offers flexibility — to change premiums or the amount of coverage — it may be a good option to consider if you want coverage to last the duration of your life. It might also be useful if you have big, long-term savings goals and you need both life insurance and an accumulation vehicle to meet them.

Yes, flexible premiums are a key feature of universal life insurance policies. Each month, you can pay the minimum or you can choose to pay more, up to IRS limits. You may also choose to skip a payment or even stop paying premiums in the future if your policy has enough cash value to cover its costs. Paying more than the minimum premium allows your policy to build more cash value over time. If you pay less, your policy stays in force as long as you have enough cash value to cover the current charges, but your coverage may not stay in place for your entire lifetime.

Yes. Universal life insurance has flexible death benefits, within the limits of your contract. You can change the amount of coverage (your death benefit) by adding more coverage or reducing coverage if the remaining policy still meets minimum policy-size requirements.