Why Was Universal Life Insurance Created? 
I think it was created to solve some very real problems with life insurance at the time , which was in the 70s and 80s . Up to that point whole life insurance was the only permanent product available . This product can be expensive because of the strong guarantees it provides . Many people would be willing to pay less for weaker guarantees , and so that makes the product uncompetitive . Whole life is also a fixed premium product . Even if you have deviations in cash flow , you have to stick to the payment schedule in order to retain your coverage . That can be an obstacle for people who fund their premium out of business proceeds , which can go up and down . One of the best revisions to this product has been the recent inclusion of a lifetime guarantee . You can basically lock into rates for the rest of your life . It wont develop much cash , but it really solves the problem of paying the lowest premium on a guaranteed basis forever . In this way kind of functions as a permanent term insurance . Comparatively low rates , but no risk of renewing at a crazy-high rate . 