Universal Life insurance differs from traditional insurance in that

  • it invites the policy owner to direct the investments within the policy rather than leaving the investing to the insurer.
  • it usually discloses the risk [mortality] costs to the policy owner and allows them to choose from various types of streams of risk charges -e.g. yearly renewable, 5, 10 or 20 year level, or level risk charges to 100.
  • it may allow the client to elect guaranteed or non-guaranteed risk charges - the latter initially costing less.
  • it often discloses the current cost of administration and may allow the client the option to elect guaranteed administration costs


golfThe policy itself is usually issued to age 100 [for life] but it is up to the client to decide

  • the actual age to which they wish to assume and illustrate coverage for
  • the kind of stream of risk charges offered
  • the yield they will expect to get on the investment mix  (be it equities or fixed income or a mix of the two)
  • the amount of cash value the client would like to see at various points in the duration of the contract
  • the amount of regular premium they wish to pay and the length of time they want to pay it for. Note that this is usually determined for the client by the first three choices but there is often the ability and the need to change the premiums as circumstances require


Today's Computer systems allow the company, it's agents and their clients the ability to illustrate a myriad of portraits of what the policy can do - custom designing the contract for them. The policy has inherent flexibility as a strength but it requires more proactive involvement by the client, who is cautioned to review the policy regularly to ensure that changes are made to the contract as needed to keep it on track to match the expectations originally illustrated.

“Flexibility is its strength and also its weakness”