Flexible Premium or Universal Life Insurance

A life insurance policy designed as a permanent policy, but different from traditional policies in that:

• It allows the policy owner to vary the amount and timing of premium payments (subject to satisfying policy premium minimums to maintain the policy), plus increase or decrease the death benefit (subject to underwriting for an increase).
• Cash values accumulate based on premium payments.

Monthly deductions are subtracted from this fund for expenses and cost of insurance. Interest is then added to this fund. In some cases the interest rates to be credited are declared by the company and vary from time to time.

Under federal law, guidelines are defined for policies to maintain status as life insurance under the Internal Revenue Code. This law puts a cap on total payments to the contract and provides a minimum relationship of death benefit to cash value.