What Is Universal Life Insurance? (2025 Guide)

Universal life insurance is a type of permanent life insurance that combines lifelong coverage with flexible premiums and a tax-deferred savings component. 

This type of life insurance splits your premium payments into two parts. 

• Cost of Insurance (COI): This covers the actual life insurance costs, including mortality charges, administrative fees and other expenses for your death benefit.
• Cash Value Component: The remaining amount goes into a cash value account, which earns interest based on the insurer's investment strategy, using stable vehicles like bonds. Over time, this account grows, and you can borrow against it or make withdrawals, depending on your policy's terms.

Cash value growth is not guaranteed and depends on market performance and interest rates. Poor investment performance requires higher premium payments to maintain coverage.

Universal life insurance costs more than term life (and often more than whole life) because it combines lifelong coverage with an investment component. But unlike whole life, your premiums are flexible and change over time based on your policy's performance.

The table below highlights average rates for different ages and coverage levels.

The life insurance costs above are based on average quotes for buyers with average weight and health ratings. Actual rates will vary depending on your profile, lifestyle, health, location and insurer underwriting guidelines.

Universal life insurance comes in several variations, each offering different levels of flexibility, risk and guarantees. The right choice depends on your financial goals, investment knowledge and how much oversight you're willing to maintain.

Universal life insurance combines permanent coverage with flexible premiums and an investment component. It gives policyholders more control than whole life but also introduces more complexity and risk.

This type of policy works well if you want long-term protection and are comfortable managing cash value performance over time. Before buying, make sure the potential benefits align with your financial goals and your willingness to monitor and adjust your policy as needed.

Have questions about universal life insurance? We've got answers.

Universal life insurance requires comparing flexibility, not just price. We gathered and reviewed 248,399 life insurance quotes to determine average rates across ages.

Why This Approach Works for Universal Life

Unlike term life insurance with fixed premiums, universal life policies let you adjust death benefits and premium payments over time. This flexibility makes comparing policies more complex: you're not just looking at price but at how each insurer structures cash value accumulation, minimum premium requirements and policy loan options.

We analyzed pricing trends and policy structures across the complete dataset to identify which insurers offer genuine flexibility without hidden restrictions that force higher premiums later or reduce your death benefit unexpectedly.

What Our Data Reveals

All quotes were updated in 2025 to reflect current pricing. While your quote depends on factors like age, health and coverage amount, our analysis reveals consistent patterns in how insurers price universal life policies and structure their features.

This research helps you understand which companies deliver competitive rates, which offer the strongest financial ratings to support lifelong coverage and which provide policy features that give you useful control over your premiums and death benefit as your needs change over decades.