Lifelong coverage, with room to adjust.
Universal life (UL) is permanent life insurance with flexible premiums and potential cash value. That flexibility is useful, but it comes with more moving parts than other policies. Our agents explain exactly how it works, including the risks, before you decide.
Where your premium goes
Each premium you pay is split. Understanding this one picture is the key to universal life.
Three common kinds
Guaranteed universal life
Focuses on a guaranteed death benefit to a chosen age, with little emphasis on cash value. Often costs less than other permanent policies for the same death benefit.
Often considered for: lifelong coverage for final expenses or a legacy
Indexed universal life
Cash value interest is linked to a market index (like the S&P 500®), usually with a cap on gains and a floor that limits losses. You're not invested directly in the market.
Often considered for: people who want potential cash value growth and understand the trade-offs
Current-assumption UL
Cash value earns interest at a rate set by the insurance company, which can change over time, usually with a minimum guaranteed rate.
Often considered for: flexible permanent coverage with simpler crediting
Benefits and trade-offs
What people like
- Coverage designed to last for life
- Flexibility to adjust premiums and, in some cases, the death benefit
- Potential cash value you may borrow or withdraw from
- Death benefit generally paid income-tax-free to beneficiaries
What to watch out for
- Paying too little can cause the policy to lapse
- Policy charges generally rise as you age
- IUL gains are limited by caps and participation rates
- Loans and withdrawals reduce the cash value and death benefit
- Illustrations are projections, not guarantees
- Surrender charges may apply in early years
Universal life questions
How is universal life different from whole life?
Whole life generally has fixed premiums and guaranteed cash value growth. Universal life offers more flexibility in premiums and death benefit, but the cash value and policy performance can depend more on interest rates and how it's funded.
Is an indexed universal life policy an investment?
No. An IUL is life insurance. Its cash value interest is linked to an index, but your money isn't invested in the stock market, and gains are limited by caps and other features.
Can my universal life policy lapse?
Yes, if the cash value can't cover the policy charges and premiums aren't increased. Some guaranteed UL policies are designed to stay in force to a certain age if premiums are paid as scheduled.
I already have a UL policy. Can you review it?
Yes. We can request an in-force illustration from your insurance company and walk through whether it's on track.
Should I use life insurance for retirement savings?
It depends on your situation. Talk with your agent and a tax or financial professional before using life insurance for anything other than protection.
Let's see if universal life fits your plan.
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