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Universal Life Insurance: A type of whole life insurance that offers some additional features and advantages. Like whole life insurance, universal life insurance accumulates cash value through investment of the premium payments. The unique feature of universal life insurance is that it has variable premiums, benefits, and payment schedules, all of which are tied to market interest rates and the performance of the investment portfolio. Also, universal life policies normally provide the insured with more consumer information. For example, an insured person is told how much of the policy payment goes for insurance company overhead expenses, reserves, and policy proceed payments, and how much is retained and invested for the insured person's savings. This information isn't usually provided with whole life policies.

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