Your universal life premium went up. Here is what the letter does not explain.

Where the increase comes from

Universal life was designed with a flexible premium supported by a cash value that earns interest. When the policy was sold, an illustration showed that cash value growing at an assumed rate, and at that rate the premium you were quoted would carry the policy for decades.

Interest rates did not do what those illustrations assumed. The cash value grew more slowly. Because it covers less of the internal cost of insurance each year, and because that cost rises as the insured ages, the carrier now needs more from you to keep the policy in force.

What to ask for before you decide anything

Call the carrier and request an in-force illustration. Ask specifically for one showing what premium keeps the policy going to various ages under current, not illustrated, assumptions.

It is the single most useful document in this situation, most people have never heard of it, and you are entitled to it. It tells you what the policy actually costs now, which is the number every other decision depends on.

• Reduce the death benefit. A smaller policy costs less. If affordability is the whole problem, this may solve it while keeping coverage in place.
• Check for riders. Accelerated death benefit, chronic illness, long-term care. Many policies carry them and most owners do not know.
• Use the cash value. Where some remains, it can sometimes carry premiums for a period, buying you time rather than solving it.
• Ask about restructuring. Carriers will occasionally work with you if the alternative you present is a lapse.
• Surrender it. Take whatever cash value is left. Quick, and often less than people expect on a policy already struggling.
• Sell it. If it qualifies. A policy expensive to maintain is worth less to a buyer too, because they inherit those premiums. But less is not nothing, and nothing is what lapsing pays.

Your options, roughly in order of how often they get overlooked

We are one of the options on that list and not usually the first one.

The only genuine deadline

Once the policy lapses, none of the above exists. It cannot be sold, there is nothing to restructure, and the premiums you have paid over twenty years return nothing.

The grace period after a missed premium is typically around a month. That is the window in which every option is still open. If the letter has arrived and the number on it is not affordable, that is the point to start working through the list, not after.