ECONOMICS

Detailed explanation-1: -Universal life insurance is also referred to as “flexible premium adjustable life insurance.” It features a savings element (cash value) that grows on a tax-deferred basis. The insurer invests a portion of your premiums. The return on the investment is credited to your policy tax-deferred.

Detailed explanation-2: -Cash value life insurance is a permanent life insurance policy, which means it can remain in effect until you die as long as you pay your premiums. If you take loans or withdrawals from the policy, you also have to make sure you maintain a minimal cash value level or your policy could lapse.

Detailed explanation-3: -Differences between universal life insurance and variable life insurance. The cash value grows differently: Universal life insurance has unpredictable interest rates that change based on the market. Variable life insurance has more predictable rates because you choose which sub-accounts grow your cash value.

Detailed explanation-4: -Variable life insurance includes a cash value component whose value changes based on: Amount of premiums paid. Fees and expenses charged by the insurance company. Performance of the investments (often similar to mutual funds) tied to the policy.