Universal Life Insurance

Life Insurance Basics

Life insurance can be a safe and reliable way to help protect the ones you love. It can provide your family the means to help replace lost income, cover the mortgage or rent, pay off debts or medical bills should something happen to you. There are several types of life insurance, but the two most popular categories of life insurance can be defined as Term Life Insurance and Permanent Life Insurance.

Whole Life Insurance is one form of a Permanent Life Insurance policy. Another form of a Permanent Life Insurance policy is a flexible policy known as Universal Life Insurance.

Benefits While Living

It’s not uncommon for people to equate life insurance with a death benefit. There are in fact some types of insurance coverage that offer benefits to the insured while they are are still living.

Universal Life Insurance (UL) is one of these types. Policyholders have a choice between paying just a minimum premium to cover actual costs of insurance or pay extra funds towards a cash value accumulation.

Universal Life Insurance policies also offer flexible premiums that may allow you to adjust how much you’ll pay each year, by accessing some of the policy’s cash value (though you will need to pay the minimum premium amount or the policy will lapse). Depending on your policy’s potential cash value, it may be used to skip a premium.

Universal Life Insurance Benefits

Universal Life Insurance can provide you with a variety of different payment options, including a flexibility of changing your death benefits, as well as the potential to accumulate cash value over time. Here’s how:

  • The interest that you may have earned over time accumulates tax-deferred
  • Some policies may allow you to increase or decrease the death benefit to match your particular circumstances
  • In many cases, you may borrow against the cash value that may have accumulated in the policy
  • Since there is a cash value component, you may be able to skip premium payments as long as the cash value is enough to cover your required expenses for that month

A Universal Life Insurance policy may be a good fit for someone needing the flexibility to change or adjust the premiums and coverage amounts. And of course, as previously stated, the ability to withdraw the cash value while a policyholder is still alive.

Relevant Resources for Universal Life Insurance

The Differences Between Term & Whole Life
Pros & Cons of Indexed Universal Life
US News: Which Is Better For You?
Learning Center | What is Universal Life?

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