Universal Life Insurance

A universal life insurance policy is more flexible than whole life insurance. It carries with it some features of term life insurance but it transfers less of the policy holder’s risk to the life insurance company. Once the life insurance company has calculated the target premium to ensure that they have enough finance to cover any claims then they can start collecting the revenue from the policy holders. With the premiums that are being paid the life insurance company will split the funds so that they allocate enough to pay the claims, which is called the mortality charge, similar to how a term life insurance policy works. This leaves the rest available for investment which gives the policy an accumulation value. The surrender value is calculated regularly to correct any fluctuations in premiums, investment and the need for mortality charges.