Universal life insurance is a type of permanent life insurance that offers flexible premiums, adjustable death benefits, and a cash value component that earns interest based on current market rates or indices. Unlike whole life insurance with fixed premiums and guarantees, universal life allows policyholders to adjust their premium payments (within limits) and increase or decrease the death benefit as their needs change. The cash value grows based on interest credited by the insurer, and policyholders can use accumulated cash value to pay premiums, take loans, or make withdrawals. Variants include indexed universal life (tied to market indices) and variable universal life (with investment options).