What is a characteristic of universal life insurance?

Universal life insurance is designed to offer policyholders flexibility and the potential for cash value accumulation. This type of insurance allows for adjustable premiums, meaning that policyholders can vary their premium payments within certain limits set by the insurer. This flexibility can be beneficial as it enables the policyholder to adapt their payments according to their financial situation at different times.

In addition to flexible premiums, universal life policies include a cash value component that grows over time, typically at a variable interest rate. This accumulated cash value can be accessed by the policyholder through withdrawals or loans. It provides a potential financial resource during the life of the policy, which is a significant feature that distinguishes universal life from other types of life insurance, such as whole life or term life insurance, which do not offer the same level of flexibility and cash value options.