What is a primary advantage of Universal Life Insurance compared to Whole Life Insurance?

Universal Life Insurance offers a primary advantage over Whole Life Insurance through its greater flexibility concerning premiums and coverage. This type of policy allows policyholders to adjust their premium payments and the amount of insurance coverage within certain limits. For instance, policyholders can choose to pay higher premiums to increase their cash value or pay lower premiums if they need to conserve cash flow at a particular time. This flexibility is particularly appealing for individuals whose financial situations may change over time.

In contrast, Whole Life Insurance typically has fixed premium amounts that must be paid over the life of the policy, resulting in less adaptability to a policyholder’s changing financial situation. Furthermore, while Whole Life policies guarantee a death benefit and provide a stable cash value accumulation, they do not offer the same level of customization and flexibility associated with Universal Life policies. This is what makes the greater flexibility in premiums and coverage a standout feature of Universal Life Insurance.