Universal life insurance is a form of permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance) which is invested to provide a cash value buildup. The death benefit, savings element and premiums can be reviewed and altered you as your circumstances change. In addition, unlike whole life insurance, universal life insurance allows you to use the interest from your accumulated savings to help pay premiums.

Premiums, which are variable, are broken down by the insurance company into insurance and savings, allowing you to make adjustments based on your circumstances. For example, if the savings portion is earning a low return, it can be used instead of external funds to pay the premiums. Unlike whole life insurance, universal life allows the cash value of investments to grow at a variable rate that is adjusted monthly.