What is not true about universal life insurance includes common misconceptions about guarantees, expiration, and cash value. Universal life insurance, which is type of permanent life insurance with flexible premiums and adjustable death benefit and cash value that grows based on interest rate credited by insurer, offered by insurers like Sun Life and Prudential, has features often misunderstood. Not true statements about universal life insurance include that universal life insurance never expires, which is not true, as universal life can lapse if cash value insufficient to cover monthly cost of insurance and premiums not paid, with no guarantee to age 120 unless guaranteed universal life rider, and that universal life cash value is guaranteed to grow, which is not true, as cash value growth depends on interest rate credited by insurer which can be as low as guaranteed minimum around 2 percent and can be depleted by rising cost of insurance, and that universal life premiums are fixed forever, which is not true, as universal life has flexible premiums and required premium can increase with age as cost of insurance rises, and that universal life death benefit is always tax free, which is mostly true but can be taxable if policy is modified endowment contract or fails definitions. So not true about universal life includes that it never expires, has guaranteed cash value growth, and has fixed premiums, as it can lapse and premiums can rise.
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