How Much Does Universal Life Insurance Cost? 
All life insurance costs are based upon life expectancy , earnings and overhead . These in combination result in the cost for one year of coverage . When the period to be protected is longer than one year then there must be consideration given to the total cost of coverage and the earnings the company could anticipate . This is where you get a premium for a 10 , 20 , or 30 year term policy . Permanent insurance does not have a termination date and as a result must consider every conceivable coverage cost and establish a program where the earnings of the policy will be sufficient to meet those obligations as they arise . Whole Life is the traditional way to handle this issue and the company designs a plan that will provide a level amount of protection for the remainder of the insureds life in exchange for a level premium . A universal life policy differs from the whole life policy in that the earnings are not guaranteed . The company maintains a separate fund . This fund will have earnings that are different from the general fund . If the earnings are greater the cost of the policy will be lower , reflecting the earnings . Because the earnings are not guaranteed they change from year to year . This affects the companys ability to pay the full death claim . Each company issues an annual statement that shows the values and projected values . The insured can reduce or increase premiums at their own discretion . 