Universal Life Insurance

 Fixed Premium UL is paid for by periodic premium payments. Generally these payments will be for a shorter period of time than the policy is in force; for example payments may be made for 10 years, with the intention that thereafter the policy is paid-up. If the experience of the plan is not as good as predicted, the account value at the end of the premium period may not be adequate to continue the policy as originally written. In this case, the policyholder may have the choice to either: 1. Leave the policy alone, and let it potentially expire early (if COI charges deplete the account), or 2. Make additional or higher premium payments, to keep the death benefit level, or 3. Lower the death benefit. 

 Flexible Premium UL allows the policyholder to determine how much they wish to pay each time premium is due. In addition, Flexible Premium UL offers two different death benefit options: 1. A level death benefit (often called Option A), or 2. A level amount at risk (often called Option B). This is also referred to as an increasing death benefit. Policyholders frequently buy Flexible Premium UL with a large initial deposit, thereafter making payments irregularly. 

 Single Premium UL is paid for by a single, substantial, initial payment. The policy remains in force so long as the COI charges have not depleted the account. Since changes in the tax code, this type of policy is now called a "Modified Endowment Contract (MEC)" and is subject to different tax treatment. All policies paid up in 5 or less years are subject to this same negative tax treatment.