As long as you pay the premium....

Permanent (cash value) life insurance pays the beneficiary whenever the insured dies, as long as premiums have been paid. (p38)

2016 11 - FIO - Report on Protection of Insurance Consumers and Access to Insurance - 58

  • Whole (or universal) life insurance policies are considered permanent.
  • As long as you pay the premium, the policy
    is in effect.  (p32)

2015 Version - Consumer Action Handbook, published by USAGov, part of the U.S. General Services Administration’s (GSA) Office of Citizen Services and Innovative - [PDF-146p] Technologies

  • The most popular document distributed by Pueblo remains the annual Consumer Action Handbook, a free trouble-shooting guide to help Americans solve all sorts of consumer problems.

Let's review the basic mechanics of Universal Life.

  • The first thing that has to occur is a premium payment. 
    • A premium may be paid at any time and in any amount desired.
  • Whenever a premium is paid, loads are deducted from that premium.
    • The balance is added to a fund.
  • On a monthly basis, cost of insurance charges are deducted from the fund.
  • Expense charges may be deducted from the fund, especially in the early policy years, and interest is added to the fund on a monthly basis.
  • The cash value changes each month based on the net impact of the income and deduction transactions.
  • The policy does not lapse if a premium is not paid; rather, it lapses if the fund balance becomes too small to pay the next month's cost of insurance. 


1981 - Universal Life, Society of Actuaries

g. Clarifying “Coverage Period Description”

  • The Working Group discussed what information is intended to be included.
  • Mr. Yanacheak said this is intended to capture how long a policy’s term is—a term of years or for life.
  • Mr. Birnbaum said it is intended to answer the question: If I pay my premium, this policy will cover x amount of time.
  •  Mr. Wicka suggested, and the Working Group agreed, to the following revised language to Section 5A(2)(e)(iii): (iii) Indicate whether it is a term or permanent policy. If it is a term policy, indicate the length of the initial term.

2019 0917 - Life Insurance Illustration Issues (A) Working Group Conference Call 

  • The personalized information in the Policy Overview is the premium for the policy – based on information known to the producer or insurer at the time and subject to change based on additional or revised information – and that information can be provided prior to purchase.
  • If an insurer can produce an illustration for a complex, investment type life insurance product prior to the consumer purchase, it is clearly possible for an insurer to provide the premium for a policy prior to purchase.

2019 0830 - LIIIWG - CEJ Letter - Birney Birnbaum


  • Since universal life insurance was then being marketed only on a very limited basis, the council task force's proposals did not address this product.
    • The council has now developed a  recommendation for universal life insurance, which we would like to present for your consideration.
  • The essence of the proposal is that universal life insurance be treated for cost disclosure purposes as a life insurance plan with a nonguaranteed cost element.
  • Thus, the policy summary would show for the prescribed policy years the anticipated premiums and, both on the guaranteed and currently illustrated bases, the death benefits, cash surrender values, and endowment amounts, if any.
    • The life insurance cost indexes would be calculated on the currently illustrated basis, using the anticipated premiums, and would be required to be shown along with corresponding nonguaranteed elements.

An additional item of information that is recommended to be required in the policy summary is the point at which the policy will expire based on the policy guarantees and the anticipated premiums shown in the summary.

1982-1, NAIC Proceedings (p399)