A universal life policy is at risk of lapsing if:

Explanation

Because universal life deducts monthly cost-of-insurance and expense charges from the cash value, the policy can lapse if the owner underpays and the cash value runs too low to cover those deductions. Simply reaching a particular age does not cause a lapse. A rising credited interest rate helps the cash value, reducing lapse risk. Naming a contingent beneficiary has no effect on the policy staying in force. This is why universal life owners must monitor funding.