An insurance policy that allows for a varying death benefit and premium level over the term of the policy, with an interest rate on the cash value that changes with market interest rates. Universal life was introduced in 1979. It combines the death protection features of term insurance with the opportunity to earn market rates of return on excess premiums. Unlike variable life, with its level premium structure, premiums on universal life policies can be changed. The policyholder can pay as high a ‘‘premium’’ as desired, instructing the insurer to invest the excess over that required for death protection in the insurer’s choice of assets. Later, if the policyholder wishes to pay no premium at all, the insurer can deduct the cost of providing death protection for the year from the cash value accumulated in previous years. With other types of policies, skipping a premium would cause the policy to lapse. Unlike whole or variable life policies, the face amount of guaranteed death protection in a universal life policy can be changed at the policyholder’s option. Also, unlike variable life, the cash value has a minimum guaranteed rate of return.