How Does A Universal Life Insurance Policy Work? 
A very simple way to picture how a Universal Life policy works is with a river with a dam on it . If the dam is open and water -LRB- your insurance premium -RRB- is flowing into the river , the river gets longer . I.e. . The years your Universal Life lasts get longer , maybe even the rest of your life . At the same time , there is very little water in the lake , or cash value in the policy . If the dam is closed , the lake gets higher , or the cash value in your policy grows . However , the river will dry up . If you want your Universal Life to build up cash value AND have longevity , you need to add more water -LRB- premium -RRB- to it . The beauty of a dam is that it can be adjusted to harness the power of water . The same is true of Universal Life insurance . It is very adjustable and can help accomplish your financial goals . 