Term life premiums cover the death benefit only and do not accumulate in value. When the specified contract period ends, premium payments stop and coverage ends. The difference is that your premium is flexible. How much and how often you pay depends on the policy's cash value and the size of the death benefit you choose. A flexible premium can be ideal when you need to reduce your coverage.
Some policyholders choose to reduce coverage as their children grow up.
With fewer dependents living at home, the need for a larger death benefit may not be necessary. Universal life policies also build cash value with a guaranteed minimum return. Variable Universal Life universal life's flexible premium payments variable life's ability to let policyholders invest their cash value. The premium amount is flexible based on the size of your death benefit and cash value policy. Plus, you control the invested portion of your premium.