Skip to Content
Multigenerational family talking on couch representing that different stages require different insurance policy types.
Policy Types

What is universal life insurance?

You may have heard about universal life insurance, but you need to understand how it works and when it might be a good choice before you consider this type of permanent life insurance.

Like whole life, universal life insurance is considered a type of permanent* life insurance policy with the potential to earn cash value. However, universal life insurance is typically more flexible than whole life insurance, allowing you greater control over several important policy components.
Universal life insurance offers:

  • The potential to grow cash value in a tax-deferred way that may help you with long-term financial goals
  • The ability to use any cash value that may accumulate to adjust your premium payments (within the limits of your policy)

Who should buy universal life insurance?

A universal life insurance policy is a unique combination of life insurance protection, policy options, and cash value building elements. As with whole life insurance, you may be able to take loans against the cash value of a universal life policy, however the death benefit and cash value will be reduced by the amount of any outstanding loans and interest upon your death.
If you like the idea of having a permanent life insurance policy that:

  • Allows you flexibility options regarding the amount and timing of premium payments, as well as the amount of coverage (increases may require proof of insurability)
  • Protects you for your entire life (if you pay your required premiums on time)
  • Has a death benefit that generally isn't taxed
  • May allow you to take out policy loans or surrender for cash
  • Offers a cash value that grows tax-deferred

*Provided required premium payments are timely made.



Arrows linking indicating relationship

Related Articles

Concerned woman looking as though she may face uncertainties and may need critical illness or disability insurance.

Critical illness and disability insurance differences

Learn more
Older couple walking with arms around each other after planning for burial insurance and funeral costs.

Should you consider burial insurance?

Learn more
 Woman drinking coffee while browsing her smartphone.

Whole life insurance: What you should know

Learn more

All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.