Universal life insurance is a type of permanent life insurance policy that offers flexibility in premium payments and death benefits, along with a cash value component. Here’s a breakdown:

1. Permanent Coverage: Unlike term life insurance, which provides coverage for a specific period (like 10, 20, or 30 years), universal life insurance covers you for your entire life as long as premiums are paid.
2. Flexibility in Premiums: With universal life insurance, you have the flexibility to adjust your premium payments within certain limits. You can choose to pay more than the minimum premium to build up cash value faster, or you can pay less when your budget is tight, as long as the cash value is sufficient to cover the costs of insurance and other charges.
3. Cash Value Component: Part of the premiums you pay goes into a cash value account, which earns interest over time. This cash value grows tax-deferred and can be accessed during your lifetime through withdrawals or policy loans. Keep in mind that loans and withdrawals may reduce the death benefit and cash value if not repaid.
4. Death Benefit Options: Universal life insurance typically offers several death benefit options. The most common options include a level death benefit, where the death benefit remains the same throughout the policy’s life, and an increasing death benefit, where the death benefit increases over time as the cash value grows.
5. Investment Options: Some universal life insurance policies allow you to allocate your cash value among different investment options, such as fixed interest accounts or indexed accounts tied to stock market performance. These investment options may offer the potential for higher returns but also come with higher risk.
6. Policy Fees and Charges: Universal life insurance policies often come with various fees and charges, including cost of insurance charges, administrative fees, and surrender charges if you cancel the policy early. It’s essential to understand these fees and charges before purchasing a policy.

Overall, universal life insurance offers flexibility and permanent coverage, making it a popular choice for individuals who want lifelong protection and the ability to adjust their coverage and premiums over time. However, it’s crucial to carefully review the policy terms, fees, and features to ensure it meets your financial goals and needs.

Term life insurance is a type of life insurance policy that provides coverage for a specific period, or “term,” typically ranging from 5 to 30 years. If the insured person passes away during the term of the policy, the beneficiaries receive a death benefit payout from the insurance company. However, if the insured person outlives the term of the policy, no benefit is paid out, and the coverage typically expires unless renewed. Term life insurance is often chosen for its affordability and simplicity compared to other types of life insurance, such as whole life or universal life insurance.