How does universal life insurance differ from whole life insurance?

Universal life insurance is designed to provide policyholders with increased flexibility compared to whole life insurance. One of its key features is that it allows the policyholder to adjust both the premium payment amounts and the death benefits over time. This means that as financial situations or needs change, individuals can modify their policies to better align with their current circumstances.

In contrast, whole life insurance comes with fixed premiums and guaranteed death benefits, which means policyholders have less ability to adapt their coverage. The adaptability of universal life insurance makes it appealing for those who want a policy that can evolve over time, accommodating changes in income, financial goals, or family needs.

Additionally, while it's true that universal life insurance does accumulate cash value, this is done in a flexible manner, unlike whole life insurance, which has a more rigid structure. Hence, the flexibility in premiums and death benefits is a significant distinction that makes universal life insurance unique compared to whole life insurance.