Current interest rates are determined from a variety of sources. Some may be tied to an outside index, such as the discount rate on 13-week Treasury Bills. Others may simply use a rate declared by their board of directors. Cash value funds are available for policy loans or partial withdrawals. Loaned values usually are credited with a different interest rate from that credited on unborrowed funds.
Some companies limit withdrawals to one per year.
Generally, universal life policies offer a choice of two different death benefit options. Under Option 1, a specific level amount of insurance is purchased. Under Option 2, the specified amount of insurance refers to the term portion of the death benefit. Each year this is equal to the initial face amount of the policy. The total death benefit equals the sum of the specified amount and the unborrowed cash value.