When buying a universal life policy, if you choose a level death benefit, your cash value is used to reduce the amount of risk taken on your life. This allows the insurance company to reduce the mortality expenses of your policy and reduce your premium payments.

A second option is add the cash value to the death benefit of your insurance policy. Your minimum premiums stay steady while your death benefit rises and falls with your cash value of the policy.

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• Premium: A set fee usually charged monthly, that you pay an insurer for a policy.
• Deductible: The amount of money you will have to pay out of pocket before your insurance begins to reimburse care, although some plans provide some reimbursement before the deductible.
• Co-Pay or Co-Payment: A set fee—such as $10 or $25—that you pay for medication or care.
• Co-Insurance: A set percentage of the total cost that you pay for medication or care.
• Network: A contracted group of doctors, hospitals and care providers who work with your insurance plan at lower rates.
• Out of pocket maximum: An annual limit on the amount of money you have to pay before your insurance covers all remaining costs. This limit does not include plan premiums.