The notable feature of universal life insurance is that the cash value grows at a more aggressive rate compared to other types of permanent life insurance, such as whole life insurance. Universal life insurance offers flexibility in premium payments, and its cash value component is typically tied to current interest rates or performance of an underlying investment account, allowing for more variability in growth rates. This can potentially result in a faster accumulation of cash value, especially during periods of favorable market conditions or higher interest rates.
While other features such as guaranteed rates of return, premium costs relative to whole life, and cash value options are relevant considerations in the realm of life insurance, they do not capture the essence of what makes universal life unique. Unlike whole life policies that tend to have fixed premiums and a guaranteed return on cash value, universal life’s aggressive potential for cash value growth is a key attraction for many policyholders who are looking for both insurance coverage and an investment component.