What is a universal life insurance policy?

A universal life insurance policy is a type of permanent life insurance that offers flexibility and potential for growth. It provides coverage for the entire lifetime of the insured individual and accumulates a cash value over time. This policy combines a death benefit with a savings component, allowing the policyholder to allocate a portion of their premium payments towards building cash value. The cash value grows based on the performance of the underlying investments chosen by the policyholder. Universal life insurance offers flexibility in terms of premium payments and death benefit amounts, allowing policyholders to adjust these aspects as their financial needs change. It also provides the ability to borrow against the cash value or make partial withdrawals, making it a versatile financial tool.