How Does Universal Life Insurance Really Work? 
It varies by UL policy and company , but here are a few basics . There are basically 2 parts to all ULs , but there may be more . The one I have has 3 parts . Part A is how much you pay into for just the life insurance coverage and part B is what goes into the accumulation account to make the policy grow money wise . A UL has flexible premiums meaning you can pay in as little or as much as you want within a specified amount within the contract guidelines . There is also the target amount which is what you probably should be paying in minimally . If you pay the minimum , it basically is a term policy that continues . If you decide you want the account to grow , you can put more money into to make the cash accumulation grow . I usually tell the clients I work with to think of it as a permanent life policy with a high yield bank savings account since most will offer you at worst a 3 % return for ever dollar you put into the accumulation section of the account . Do keep in mind that rates maybe be more or less depending on the policy and current interest rates that the insurance company uses . There are many other factors in these types of life policies , but that is the basics of it . 