If a policyowner does not pay the premium on time and has no withdrawal values, what happens to the policy?

In the context of a Variable Universal Life (VUL) or Universal Life Plan (ULP), if a policyowner does not pay the premium on time and there are no withdrawal values available, the policy will typically terminate immediately. This is because the policy relies on premium payments to maintain its coverage and cash value. Without a premium payment and without existing withdrawal values, there are no funds to support the policy, leading to its termination.

While some policies may offer grace periods for overdue premiums, the absence of withdrawal values indicates that there are no accumulated funds within the policy; thus, it cannot sustain itself. This situation underscores the importance of making timely premium payments to keep the coverage active.