Universal life insurance is a type of policy where a person is allowed to choose a premium and the benefit. It allows a person to opt for a long-term/permanent protection with a lower premium.
Universal life insurance is an alternative to a whole life policy, where the premium rates are set by the insurance company. The premiums of universal life insurance are paid into an account, thus generating cash value as the premiums are invested into investment funds. With universal life insurance, a person has the flexibility of lowering the death benefit any time they want. He or she can also add more benefits to the policy.