Understanding Universal Life Insurance

How Universal Life Insurance works

Universal Life Insurance offers a policy that pays out a lump sum when the policyholder passes away. The difference with this policy is that you gain interest on the sum of the money that is placed in an investment account.

At a point within your lifetime, the amount of money in the investment account can match the amount you are insured for, meaning you will no longer have to make monthly payments.

Benefits of Universal Life Insurance

Universal Life Insurance offers flexibility and long-term financial planning benefits that can adapt as your needs change.

You can change, remove or add cover and benefits at any time.
You can stop payment when you reach a certain age.
There is potential to grow your money far more than if it was put straight into a bank.

Compare Universal Life Insurance quotes

While this is a more expensive policy due to the investment risk involved, you won’t know if it suits you until you do your research. Compare what different providers can offer and find the best deal on Life Insurance that aligns with your long-term financial goals.

Compare 12 of SA’s top Life Insurers

All our Life Insurance partners are licensed Life Insurers and FSP’s, vetted to meet our internal compliance and quality standards.

We are always trying to add more brands for our customers. If you don’t see a brand, that’s their decision.

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Life cover that can flex with you

Frequently Asked Questions

What is Universal Life Insurance?

Universal Life Insurance is a policy that pays out a lump sum when the policyholder passes away. What makes it different is that part of your money is placed into an investment account, and you can earn interest on that amount over time.

How does the investment account work in Universal Life Insurance?

Part of your money is placed into an investment account that can grow through interest. In some cases, the account value can match your insured amount, which may allow you to stop paying premiums later in life depending on policy terms.

Can I change my cover on Universal Life Insurance?

Yes. One of the main benefits is flexibility — you can change, remove, or add cover and benefits at any time, depending on what the insurer allows and what your needs are.

Can I stop paying premiums at a certain age?

In some cases, yes. If the investment account grows enough within your lifetime, it may reach a point where it can match the amount you are insured for. That could mean you may no longer need to make monthly payments, depending on the policy terms.

Why can Universal Life Insurance be more expensive?

It can be more expensive because there is more risk involved due to the investment component. Premiums and costs can vary depending on the provider, the cover amount, and how the investment portion is structured.

What are the key benefits of Universal Life Insurance?

The main benefits include flexibility to adjust benefits, the option to potentially stop paying premiums at a certain point, and the possibility of growing your money more than you would by putting it straight into a bank.

How do I know if Universal Life Insurance is right for me?

Because Universal Life Insurance can be more expensive, it’s best to compare providers and quotes to see whether the benefits and investment structure suit your needs and budget.

Expert Tools, Tips and Guides

Explore our Life Insurance guides, from basic policy explanations to specialised cover like Mortgage Life Insurance, joint cover and high-risk options.

What is a Life Insurance policy?

Find out how Life Insurance works, what it covers, and how to choose a policy that fits your needs.

Life Insurance for Children

Understand how cover for children works, how value builds over time, and when these policies pay out.

Life Insurance for Over 50

Explore Life Insurance options for people over 50, including cover that pays a lump sum to your beneficiaries.

High-Risk Life Insurance

See how insurers assess higher-risk jobs, hobbies and health profiles, and what that means for your premiums.

Joint Life Insurance

See how one policy can cover you and your partner under shared terms, and when a joint policy makes financial sense.

Traditional Whole Life Insurance

Learn about lifelong cover (often up to age 95), fixed premiums and guaranteed payouts to your beneficiaries.

Term Life Insurance

Understand fixed-term cover, how it works for temporary needs, and what happens when the term comes to an end.

Pre-Existing Medical Conditions

Find out how existing health conditions affect your Life Insurance application, waiting periods and exclusions.

Mortgage Life Insurance

See how this type of cover protects your bond by paying off the outstanding home loan if you pass away.

Critical Illness Cover

Learn how Critical Illness Cover works, what conditions may be covered, and how payouts can help with treatment and recovery costs.

Life Insurance for Parents

Learn how to take out cover for your parents when they can’t do so themselves, or add them to your existing policy.

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*Based on independent research by Kaufman Levin & Associates 2025.

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