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Universal Life Insurance
Universal Life Insurance offers a kind of flexible policy that allows you to vary your premium payments, as well as adjust the face amount of your coverage. Increased coverage may require proof that you qualify for a new death benefit. The premiums (less expenses) in a Universal policy are placed in a policy account that earns interest. Charges are deducted from the account. If your annual premium payment plus the interest earned by your account is lower than the total charges, the account value will drop. If it continues to drop, your coverage will eventually end. To prevent this from happening, you may need to start making premium payments, increase premium payments, or lower your death benefits. You may choose to continue to pay your premiums regardless of the amount in your account; this will allow you to continue to build cash value.
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