What characterizes universal life insurance?

Universal life insurance is characterized by its flexible premium structure, which allows policyholders to adjust the amount and frequency of their premium payments. This flexibility is one of the key features that distinguishes it from other types of life insurance, such as whole life insurance that usually requires fixed premiums.

In addition to providing a death benefit, universal life insurance also accumulates cash value over time. The cash value component grows at a variable interest rate set by the insurer, providing an opportunity for the policyholder to benefit from potential interest earnings. This allows the policyholder not only to secure financial protection for their beneficiaries but also to build a savings element within the policy.

The combination of a flexible premium and the dual benefit of a death benefit and cash value are what make universal life insurance a popular choice among many individuals looking for adaptable life coverage options.