Flexible premiums, if someone watches them.
Universal life lets you change what you pay and how much coverage you carry. I show you what keeps a policy in force and what can quietly make it lapse.
Quick answer Universal life insurance is permanent, cash value life insurance in which the premium, death benefit and cash value are tracked separately, so you can pay more, pay less or skip payments once enough has built up.
- In universal life, premiums go into the cash value, interest is credited, and the insurance company deducts its expenses and the cost of insurance.
- Most universal life policies don't guarantee premiums, cash value or benefits over the long run, and internal charges can rise every year.
- If credited interest falls below what the illustration assumed, or payments are reduced or skipped, a universal life policy can need more money or lapse.
- An in-force illustration is an updated projection for a universal life policy you already own, showing where it stands and how it may perform.
- Variable universal life products are securities, and the person selling them must also be registered with FINRA.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed October 2026 · How this page is researched
Premium, coverage and cash value move separately
In a universal life policy the premium, the death benefit and the cash value are tracked on their own. Premiums go into the cash value, interest is credited, and the company deducts its expenses and the cost of insurance. Once enough has built up, you can pay more, pay less or skip a payment, and a policy can even be set up to work much like term coverage.
That flexibility is also the risk. Most universal life policies don't guarantee premiums, cash value or benefits over the long run, and internal charges can rise every year. If credited interest falls short of what the original illustration assumed, the policy may need more money to stay in force, and some owners have been asked for large payments or seen a policy lapse with little value. I check the numbers before you buy and again as the years go by.
- Flexible premiumPay more, less or skip, as long as the cash value can cover the policy's costs.
- Cost of insuranceA charge taken from the cash value that can increase over time.
- Credited interestCash value earns interest the company credits, which may follow an outside rate.
- Adjustable benefitThe death benefit can be changed, though an increase usually means a medical exam.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- Current policy: the latest annual statement and in-force illustration, if you have one.
- Goal: lifetime coverage, cash value, or the smallest outlay for a permanent benefit.
- Death benefit: the amount you want to keep in force.
- Premium plan: what you can pay each year and for how many years.
- Ages: the insured's date of birth and when you'd like payments to stop.
- Loans and withdrawals: any taken from an existing policy.
Universal life, answered
Why does my universal life policy suddenly need a bigger premium?
Charges come out of the cash value and can rise each year. If credited interest has been lower than the illustration assumed, or payments were reduced or skipped, the cash value may not cover those charges. Without more money the policy can lapse.
What is an in-force illustration?
An updated projection for a policy you already own, showing where it stands and how it may perform from here. After the first policy anniversary the company provides them, and you can request one. In New York, owners are entitled to one free each year. It's the first thing I ask for when reviewing an older policy.
Can I skip premiums on universal life?
Once enough cash value has built up you can change or skip payments, as long as the account covers the policy's costs. If the savings run out, the policy may lapse and coverage ends, so check before stopping payments for a long stretch.
What in a universal life illustration is guaranteed?
An illustration shows guaranteed and non-guaranteed values. For universal life, the current death benefit, the projected cash value and the premiums based on them are non-guaranteed. Illustrated values are held to the company's recent actual experience, but they can still change.
How is variable universal life different?
Variable universal life lets you invest the cash value in accounts such as stock and bond funds, so it can grow faster or fall, and the death benefit can move with it. Variable products are securities, and the person selling them must also be registered with FINRA.
Should I replace an underfunded universal life policy?
Not before comparing the alternatives. Your current company may let you lower the death benefit or change the premium, while a new policy means new underwriting at your current age and a new contestable period. I compare the options in writing.
Do you offer universal life insurance outside California?
Yes. Clients across the country send the same quote form. California policies are placed directly; outside California the request is handled together with a partner agency in your state, and the shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.
Official sources
- California Department of Insurance: Life Insurance and Annuities guide (universal and variable universal life)
- New York Department of Financial Services: consumer alert on universal life policies (2019)
- NAIC: life insurance illustrations (Model #582)
- Insurance Information Institute: types of permanent life insurance policies
Send the statement. I'll read it with you.
For a policy you own, the latest annual statement is enough to start. For a new one, a rough amount and a yearly budget.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.
Tell me how to reach you. I’ll take it from there.
Takes about 30 seconds. I review every request personally and call you back, usually the same day.
(424) 552-4545Answered 24/7 · CA License #4348151
Get a reminder before your renewal.
Tell me when your policy renews and I’ll email you about six weeks before, when it’s worth comparing. One email, no calls.