The plan usually defines the benefit as a small percentage of the employee's earnings, such as one percent for each year of service. The total of these units is the amount he or she will receive each year upon retirement. If a unit of annuity is purchased each year to fund the ultimate benefit, this may also be referred to as a unit-purchase type of plan. As in traditional policies, universal life pays a death benefit and accumulates cash value. Unlike traditional products, universal life completely separates the protection element from the accumulation element of the policy.
Cash value builds and is used to buy term insurance.
The flexible features are the premium, the death benefit, the payment, and the protection periods. These plans do not receive special tax treatment. Claims in the making that have not yet been reported to the insurance company. Also, the reserve set up to meet those claims. A creditor of a debt not secured by any collateral or mortgage.