Definition of "Flexible Premium Policy"

A life insurance policy in which the policy owner has the option to pay more or less than the scheduled premium. Such policies include variable universal life and universal life insurance. This contrasts with whole life, whereby the premium is fixed at the time of policy issue. Note that, with flexible-premium policies, there may be a risk that the policy may consume its own policy values and eventually terminate without value if premiums being paid are lower than the scheduled premium or if loans or withdrawals are made.