About Universal Life Insurance Universal life insurance is a less rigid version of whole life insurance. A universal policy allows the holder to adjust his or her premium payments and death benefit over the life of the policy. The cash value portion of a universal life insurance policy will also reflect any increase or decrease in premiums payments. Below are points to remember about univeral life: Choose a company that gives fair treatment of old policies relative to the current pricing on newer policies. A universal policy allows the holder to adjust his or her premium payments and death benefit over the life of the policy. The cash value portion of a universal life insurance policy will also reflect any increase or decrease in premiums payments. Monthly premiums must sustain a basic benefit amount and cover the cost of the policy's monthly maintenance by the insurer. Universal life insurance policies are tied to shorter-term interest rates so their rate of return can be significantly higher or lower when interest rates are falling. Increasing the face amount may require an additional medical examination. Universal life insurance allows you to vary the amount of coverage (i.e. future mortgage, college education or children), so you don't have to keep switching policies. Monthly premiums must sustain a basic benefit amount and cover the cost of the policy's monthly maintenance by the insurer. Cash value yields and your premiums will fluctuate with the changing economy and interest rates Universal life insurance earns interest at the current money market rate. Insurers make no minimum guarantees concerning your "cash value" savings on such a policy. If the interest rates drop, it is likely you will have to pay more in premiums to maintain the policy. On average, the cash value of a universal life insurance policy can grow faster and larger than the cash value savings of a whole life insurance policy.