Best Universal Life Insurance

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Contributor, Benzinga
October 31, 2022

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Life insurance policies are more interesting than you think. Sure, they’re a protection against the unexpected, but did you know that many people use them as investment vehicles as well?

Permanent life insurance, like whole and universal life, offers great tax benefits on top of the stated death benefits, and the flexibility of a universal life insurance policy even affords customers the ability to alter premium schedules and increase value. Let Benzinga show you how universal life coverage can serve as both protection and as an investment vehicle at the same time.

Guardian Life Insurance

Guardian offers all types of life insurance, including term, whole and universal life. Policy features include the ability to convert term to whole or universal life before the expiration date. Universal life policies begin at $100,000, premiums are flexible, and the policy is fixed. Applicants ages 18 to 85 are eligible.


  • Policyholders eligible to earn dividends
  • HIV patients can qualify
  • Offers survivorship policies


  • Website lacks details
  • Policy prices not readily available

John Hancock Life Insurance

John Hancock offers competitive rates for seniors. It also offers special incentives for healthy customers. John Hancock underwrites term, whole and universal policies, including indexed and variable plans. Universal policies require a medical exam and can be quite expensive for younger people. Specific policies cover those with diabetes under the Aspire plan.


  • Good rates for seniors
  • Accelerated death benefits
  • Disability benefits


  • Expensive for young people
  • No temporary coverage

Northwestern Mutual

Northwestern Mutual offers the whole gamut of life insurance policies: term, whole and universal. Universal life insurance policies from Northwestern Mutual allow the customer flexible payment and coverage choices. Northwestern Mutual offers both types of universal life policies: single premium and custom universal life. Custom universal allows the customer to adjust payments between premiums and the death benefit.


  • Great customer service
  • Highly rated by J.D. Power
  • Pays dividends to members


  • Website not highly informative
  • Few term risers available

Massachusetts Mutual Life Insurance Co. (MassMutual)

MassMutual offers term, whole and universal life insurance. Universal life policies at MassMutual include standard as well as variable universal. Variable policies include standard and indexed coverage as well. Policyholders have the option to invest in:

  1. Mutual funds
  2. Bonds
  3. Indices


  • Simplified issue whole life
  • Universal policies have surrender value
  • Policy loans available


  • High rates for smokers
  • Noncompetitive rates for seniors

Mutual of Omaha

Besides term life insurance, Mutual of Omaha offers a wide array of permanent life insurance policies. Whole life policies include:

  1. Whole life
  2. Guaranteed whole life
  3. Living promise whole life
  4. Children’s whole life
  5. Universal whole life

Mutual of Omaha offers three types of universal plans, two indexed. All provide death benefits with cash value accumulation. The AccumUL Answers Universal Life plan guarantees customers earn a minimum of 2% interest annually. Guaranteed rates of return for the AccumUL Answers plan is higher than average universal plans, which guarantee no losses or 0% gains.


  • Mutual Perks program
  • Children’s life insurance
  • Great rates for people younger than 45


  • Graded (reduced) death benefits
  • Detailed information available only through an agent

New York Life Insurance Co.

New York Life Insurance offers term, whole and universal policies. Simplified term life is offered through the company’s website and means guaranteed coverage for up to $150,000. Simplified whole life is offered for up to $50,000. Universal life and survivorship policies include three benefits options: Level, Increasing and Premium

Universal policies are available for people up to age 90, with minimum coverage of $25,000. Riders for universal policies include:

  1. Life extension
  2. Living benefits
  3. Accidental death benefit
  4. Guaranteed insurability
  5. Monthly deduction waiver


  • Great rates for young people
  • Wide array of offerings
  • Conversion capabilities


  • No 30-year term
  • Mobile app below par

What is Universal Life Insurance?

Universal life insurance is a type of permanent life insurance. Just like a whole life policy, universal life covers you until death. Also known as adjustable life, universal life is the same as whole life in that it carries with it a cash value. It differs from whole life, however, in that it is more flexible. A universal life policy allows you to increase the death benefit or even change your premium payment schedule.

How Does Universal Life Insurance Work?

There are two main parts to a universal life insurance policy. The first part is the insurance, or the death benefit. Universal coverage, like whole and term life, consists of a death benefit for protection.

Like whole life, universal life has a cash-value account. When you make your payments, the insurance company first takes out the cost of the insurance, plus any other fees. The rest is then deposited into a cash-value account. The same holds true for whole life policies, but this is where universal and whole life part ways.

Having a universal life insurance policy means having more options and greater flexibility. Unlike a typical whole life policy, universal life gives you the option of increasing or decreasing your death benefit as you see fit. Besides the amount, you also have the option of choosing exactly how your death benefit gets paid. You can go with a:

  1. Level death benefit: This means the death benefit remains the same throughout the duration of the policy — no matter the amount you have accumulated in your cash-value account. If your death benefit is set at $500,000, then your beneficiaries receive that same $500,000. Your cash-value account remains the same.
  2. Combined death benefit: This is where the amount in your cash-value account gets added to the death benefit. Using the previous example, say you have $50,000 in your cash-value account. That means your beneficiaries will receive $550,000 when you die.

Types of Universal Life Insurance

Guaranteed universal life

A guaranteed universal life insurance policy is for the more risk-averse investor. These policies offer lower-cost options and a fixed death benefit. They are more affordable than standard universal life policies because they carry with them little or no cash value. While they do offer some flexibility, premiums typically remain fixed.

Variable universal life

Variable universal life operates more like a traditional universal life policy and then some. Not only are variable universal life policies geared toward building cash value, but they also allow options on exactly how to do so. A variable universal life policy gives you the option to invest the money in accounts similar to mutual funds, thus allowing for greater potential earnings. With greater control, however, there is a greater risk. Variable universal life policies are for the more savvy investor, and fees tend to be higher.

Indexed universal life

For the truly risk-oriented, there’s indexed universal life insurance. Indexed means that investments in your cash value account get linked directly to the stock market. Indices such as the Dow Jones, the NASDAQ and the S&P 500 get linked directly to your cash-value account. While funds don’t earn a fixed rate of interest, there are interest rate guarantees. This means that while there is protection against loss, you could lose money because of administrative fees and charges. Because of these guarantees, gains are capped.

Pros and Cons of Universal Life Insurance


  • Potential for cash value growth: In a universal life policy, your cash-value account earns interest at the market rate. This is different from a whole life policy where the interest rate is guaranteed.
  • Flexible death benefit: You have the option of increasing or decreasing the death benefit as you see fit.
  • Cash value potential: With a universal life policy, you have the potential for greater growth because your returns are based on market rates, not a fixed guarantee.


  • Increased investment risk: The flipside to realizing greater gains in the market is that you could lose money, depending on which way the market goes. Universal life policies are for more risk-oriented investors who want the potential for greater gains.
  • Greater responsibility: Unlike a whole life policy, which you can basically put on autopilot and just pay your premiums, a universal life policy requires greater attention. If your policy becomes underfunded, for example, you could see an unexpected spike in premiums.

Universal Life Insurance: Wrapping Up

Whether you’re looking for the most basic universal life insurance like a guaranteed policy, or you want the potential for more gains like with variable or indexed universal, let Benzinga show you the way. Benzinga has a wide array of articles on all types of life insurance — everything from basic whole life to indexed and variable universal.

Frequently Asked Questions


Which is better: whole life or universal life?


It depends on what you’re looking for. If you’re looking for the comfort of a whole life policy, knowing exactly what your premiums are and how much cash value will be added every month, then whole life is for you. If, however, you’d like more flexibility and the potential for bigger gains, then a universal life insurance policy — variable or indexed — is your best bet.


Does universal life insurance expire?


A universal life insurance policy is permanent insurance and does not expire like term life. Universal life is in force for the duration of your life or until you stop making payments or cash it in.


What interest does universale life insurance pay?


Universal life insurance policies pay interest at the market rate.


Benzinga crafted a specific methodology to rank life insurance. To see a comprehensive breakdown of our methodology, please visit our Life Insurance Methodology page.