Universal insurance is permanent life insurance that includes both pure insurance and investment components, similar to whole life insurance. However, universal life insurance allows the owner to adjust either the amount of premiums to be paid or the amount of the death benefits to be paid at death. The rate of return on the investment component is based on the results of the company’s general asset account. The owner is not allowed to dictate what type of investments are made.

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Because universal life insurance is intended to be a policy that stays in effect for your entire life, the premiums that you pay can be adjusted so that they are evenly distributed over your lifetime, are paid only for a set number of years, or the premiums are bigger in the early years and then lower in later years, for example after you retire.

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