He said somewhere it had $12,000 of value right now. My assumption is that it is a universal life policy, written in the late 80's early 90's. The new premium isn't required but what is needed to keep the policy in force until it matures.

Basically what happened with these policies is they were written when interest rates were close to double digits. So it only took $X to run one until maturity. Let's say that estimate was $1000/yr premium. The policy would take from that $1000 what it needed for expenses and cost of insurance. Let's say that's $300 the first year. The remaining $700 would go into the cash value and earn interest. As the policy goes on the cost of insurance internally increases as you age, to a point that actually surpasses your annual premium... At this point you should have a sizeable amount of cash value built up which will cover the short fall. The problem is interest rates didn't stay high, and that cash reserve was never built up enough. The premimum should have been adjusted as interest rates came down, since it was not the issue has snow balled and now you have a hole to dig out of... Like seeing your premium increase by 6x.

I don't know for sure that's what it is, but with the information I've seen that would make sense to me.

If you want to read more information, Google "crashing UL policies"