The Regulation of Universal Life Opens a New Chapter for Insurers and Consumers
A New Legal Framework in Brazil Revolutionizes Its Financial Market
The transformation of the insurance market in Brazil is not new—this process has already been underway for several years. However, on November 5, 2025, the regulation governing universal life insurance, known as Universal Life, came into effect, marking a turning point for the entire industry.
The Superintendência de Seguros Privados (SUSEP) is now opening the door to major changes for insurers, distributors, and consumers, driving a more modern and flexible model.
What Is Universal Life and Why Is It So Relevant?
In markets such as the United States, this product has existed for a long time. It can be described as an insurance solution that combines protection and wealth-building simultaneously.
Universal Life consists of:
- A traditional life insurance coverage, which protects against risks such as death or disability.
- A financial reserve, which grows over time. Part of the premium is allocated to this reserve, which customers can use to pay future premiums, withdraw, or access as a source of liquidity.
This structure enables a far more flexible product than traditional life insurance—and that flexibility is precisely what drives the new regulation in the Brazilian market.
The Most Relevant Changes in the New Regulation
Among the most significant innovations are:
- Exemption from prior product approval in certain cases.
- Greater clarity for consumers regarding how the product works.
- Reduction of minimum contract terms.
- Permission for extraordinary contributions, increasing customer flexibility.
- More freedom in how the financial reserve is structured, which can now be linked to indices such as the CDI or investment portfolio returns.
However, some tax-related issues remain unclear: it is still not defined how accumulated and withdrawn amounts will be taxed.
Impact on Insurers, the Market, and Consumers
For insurers that act now, the opportunity is clear: they will be able to position themselves years ahead by developing more innovative products that combine protection and accumulation.
For the Brazilian market, this regulation may drive strong growth in demand for life insurance, which remains relatively low in the country.
For consumers, it means more options, more flexibility, and a meaningful step forward in personal financial planning.
Operational and Financial Education Challenges
The new scenario introduces important challenges:
- Greater consumer education will be necessary due to the increased sophistication of the product.
- Operationally, insurers and distributors will need to adapt to managing simulations, extraordinary contributions, and withdrawals.
- It will be essential to have technology capable of managing more complex products end to end.
Updating a single process is not enough: modernizing the entire product lifecycle is required, integrating governance, policies, commercial limits, actuarial simulations, regulatory rules, and all essential data.
N5: Technology Ready for Universal Life
At N5, we have already anticipated this shift. We offer a complete solution for Universal Life products, integrating everything needed into a single tool—flexible and fully connected to insurers’ core systems.
The regulation of universal life insurance in Brazil marks a new moment for the sector. It represents progress that opens space for innovation, but also demands technical preparation, regulatory clarity, and investment in technology.
If you want to explore how N5’s technology can support this transition,
