Which policy feature distinguishes a universal life policy from a whole life policy?

A universal life policy is characterized by its flexible premium schedule, which allows policyholders to adjust their premium payments and potentially vary the amount and frequency of those payments. This flexibility is a significant difference from whole life policies, which typically require fixed premium payments.

With universal life insurance, the policyholder can pay more than the required amount during certain periods, allowing for the accumulation of cash value. Alternatively, if policyholders face financial challenges, they can decrease their payments or even skip them altogether, as long as there is sufficient cash value to cover the cost of insurance. This adaptability supports a range of financial needs and goals that may change over time.

In contrast, whole life policies maintain a fixed premium and cash value growth, leading to less flexibility in how policyholders manage their payments. Understanding this distinction is essential for those considering their life insurance options, as it impacts both premium management and the potential for cash value accumulation over the life of the policy.