Universal Life Insurance (UL)

Universal life insurance is a type of permanent life insurance that offers both death benefit protection and a savings component. The savings component, also known as the "cash value" component, is invested and can accumulate over time, providing the policyholder with a source of savings or investment.

Unlike term life insurance, which provides coverage for a specific period of time, universal life insurance provides coverage for the entire life of the policyholder as long as the premiums are paid and the policy is in force.

Premiums for universal life insurance are flexible and can be adjusted to meet the policyholder's changing needs and budget. The savings component of the policy can also be used to pay the premiums, increasing the policy's cash value and death benefit.

It's important to note that the performance of the cash value component of the policy is dependent on the performance of the underlying investments and interest rate, so the policyholder should be aware of this risk. Also, the policyholder may need to pay extra premium to maintain the coverage, if the cash value is not enough to cover the cost of insurance.