universal life insurance

A universal life insurance policy is considered "unbundled" life insurance because there is a clear equation for how the premium is used.

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The premium is paid into the policy. Interest is paid on the amount of money accumulated in the policy. From that accumulation of money is deducted the mortality cost and the cost of any policy rider provisions. The mortality cost increases with age as do term insurance premiums. The premium is usually flexible within limits, and the policy will continue as long as there is sufficient money in the policy to pay the mortality and other rider costs.