Look What Universal Life Begat

When universal life insurance was introduced in the early 1980s, it was an almost-instant smash. Today, it is gradually fading away. Yet universal life is spawning a welter of similar products that could shake up the industry and provide more and better choices for consumers.

A rarity in an industry that's known for its stuffiness, universal life was a true innovation: an insurance product that fluctuated with current interest rates and had flexible premiums. Policyholders could increase, decrease, or skip premium payments, increase the death benefit, or add to the cash-value in the policy. And universal life policies offered higher rates than did traditional whole-life policies.