Universal Life Insurance

Universal Life Insurance

Universal life insurance is a flexible type of permanent life insurance, allowing you to make adjustments to the amount of your premium or death benefit at any time. A universal life insurance policy provides lifelong coverage and accumulates tax-deferred cash value over time. BENEFITS OF UNIVERSAL LIFE INSURANCE
The main benefit of universal life insurance is its flexibility. With a universal policy, you make decisions about the coverage you need, and can adjust the death benefit and change the cost of your premiums.
Flexible Premium Costs
Throughout your life, your circumstances will change. Generally during the income producing years, your financial ability is greater than during your retirement years. A universal life insurance policy allows you to make adjustments to the premiums as your life situation dictates – increase, decrease or choose to skip some premium payments. Similarly, you may elect to increase the death benefit or decrease it, depending on your needs. Many prefer this type of control over their policy, as opposed to the steady premium amount and set death benefit that represents a typicalwhole life policy.




Cash Value
Universal life insurance gains tax-free cash value that is available to you in the following ways:
If you cancel the policy, you can receive the cash surrender value
You can take a loan out on the policy
Cash can be used to pay premium amounts
Cash received at time of cancellation can be used to supplement retirement income
UNIVERSAL LIFE INSURANCE POLICY DRAWBACKS

In comparison to a whole life insurance policy, the amount of cash value for a universal policy is not guaranteed because it is determined by the investment performance of your premiums.
Although you have the option to make adjustments to your premium amounts, there is a target premium that must be adhered to. Also, changes to the premium amount are dependent upon having adequate money in the cash value account to cover the costs.
Even with adjustable premiums, the cost of universal life insurance may still be too expensive for your financial situation. Visit the term life insurance section for details on lower cost life insurance protection and get a free quote today.