What is a universal life insurance policy?

Answer 1

A universal life insurance policy is a cash value type of life insurance policy.

With universal life insurance, you policy may build up cash values over time, similar to a whole life policy, but typically less expensive than whole life insurance.

Another feature of some universal life insurance policies is called a "no lapse guarantee" With this feature, as long as you pay your premiums, the policy is guaranteed to last to age 100 and beyond depending on the specific carrier you choose. Compare this to a whole life insurance policy where the premium requirements may vary and depend on how dividends and interest rates perform.