How Does A Universal Life Insurance Policy Work? 
A Universal Life -LRB- UL -RRB- policy is one in which part of your premium goes to pay for the actual cost of the insurance -LRB- the death benefit -RRB- . Since you can pay excess premium , the excess goes toward the cash value portion of the policy . The cash value can continue to grow with your contributions as well as with interest that is earned . UL policies are very flexible in that you can borrow from the cash value , you can adjust the amount you 're paying each month , you can even stop paying premiums because they could actually be paid with the cash value in the policy . You could even -LRB- for example -RRB- build a policy that grows cash value , then literally plan a future withdrawal - maybe for college tuition . 