Universal life insurance is a flexible type of permanent life insurance that allows the policyholder to adjust the premium payments and death benefit as their needs change. It consists of a death benefit component and a cash value component, similar to whole life insurance. The key difference is the flexibility it offers in terms of premium payments and death benefit adjustments, making it appealing for individuals seeking more control over their policy.

Variable universal life insurance is a type of permanent life insurance that offers both a death benefit and a cash value component, similar to universal life insurance. However, what sets it apart is that the policyholder can invest the cash value in a range of investment options, such as stocks, bonds, and mutual funds. This means the cash value and death benefit can fluctuate based on the performance of these investments, introducing an element of risk and potential reward.