---
title: Universal Life Insurance: How It Works | Coverfolk
url: https://coverfolk.com/coverage/universal-life
updated: 2026-10-08
---

# Universal life insurance

Lifetime coverage where you can change how much you pay. Flexible, but you have to keep an eye on it.

[How much do I need?](/calculator)

Updated October 8, 20264 sources[Fact checked](/editorial-standards)

The short answer

Universal life is permanent life insurance with a cash value account and flexible payments. You can change how much you pay and how big the death benefit is, within limits.

## Who it fits

People who want lifelong coverage, some savings, and the freedom to change their payments over time.

Who buys it
:   Ages 18 to 80

Medical exam
:   SometimesDepends on age, amount and company

Ages
:   Texas says universal life stays in effect until the maturity date, usually age 95 or 100, as long as there is cash value.

## What to know before you buy

**Flexible payments**

You can raise, lower, or skip premiums. But changes can affect how long your coverage lasts.

**The cost goes up as you age**

The cost of insurance is not locked in. It rises each year, and it comes out of your cash value.

**It can lapse**

If your payments and interest do not cover the costs, your cash value drops. If it reaches zero, the policy can end.

**Read your yearly report**

The company sends a report each year. It shows your cash value and how long the policy may last.

**No lapse guarantee option**

Some policies have a no lapse guarantee. It keeps coverage going if you pay the set premium on time.

**Types differ**

Indexed universal life ties interest to an index. Variable universal life puts money in investment accounts that can lose value.

## Common questions

Can I skip a payment?

Often yes, but the cost comes out of your cash value. If it runs out, the policy can lapse.

Is the interest rate guaranteed?

Texas says most universal life policies earn a guaranteed minimum rate. Variable universal life does not, because it depends on investments.

What happens at the maturity date?

Texas says coverage ends and you get the cash value.

Can I borrow from it?

Florida says most universal life policies allow loans and withdrawals. Unpaid loans lower the death benefit.

## Learn more

[**What is cash value in life insurance?**](/answers/what-is-cash-value)[**What is a life insurance illustration?**](/answers/policy-illustration)[**What happens if I stop paying my whole life policy?**](/answers/stop-paying-whole-life)

## Sources

1. [Texas Department of Insurance: Life insurance guide](https://www.tdi.texas.gov/pubs/consumer/cb018.html)
2. [Florida DFS: Life insurance overview](https://www.myfloridacfo.com/division/consumers/understanding-insurance/lifeinsuranceoverview)
3. [Washington OIC: A consumer's guide to life insurance](https://www.insurance.wa.gov/sites/default/files/2025-03/life-insurance-guide.pdf)
4. [North Carolina DOI: FAQs about life insurance](https://www.ncdoi.gov/consumers/life-insurance/faqs-about-life-insurance)

Other coverage

## Compare with the others

[Ages 50 to 85

### Final expense

Small whole life plans that pay for a funeral and last bills.

See final expense](/coverage/final-expense)[Ages 18 to 65

### Term life

The most coverage for the least money, for 10 to 30 years.

See term life](/coverage/term-life)[Any age

### Whole life

Coverage that lasts your whole life and builds cash value.

See whole life](/coverage/whole-life)