What is Universal Life Insurance?
"An affordable life insurance that offers the best of both worlds?"
"What is Universal Life Insurance," you ask? You're in the right spot because here we’ll be covering that question. Universal life falls under the category of permanent life insurance. If you’re confused about this statement then you should mosey on over here to learn more about it on permanent life insurance. The key is education. It’s no secret that everyone wants affordable life insurance! You may soon find out that universal life will be more affordable than whole life. Intrigued? Read on for more information on “What is Universal life insurance?”
Features of Universal Life Insurance
- Flexible Premiums – If you can’t make a payment you have the option of skipping (see below for more info.)
- Adjustable – If you need more or less coverage you have the option to change it, resulting in just the right amount of coverage to protect those you love.
You can get some more universal benefit information here on: Life insurance universal benefits.
What is Universal Life Insurance?
Is it really the best of both worlds?
Universal life insurance is a permanent policy. You could say that Universal life has the best of both worlds (between term and permanent). Why? Because universal offers a lower more affordable premium than a traditional whole life policy but also has the added benefit of building cash value (something that term won’t do). Learn more about term policies and who they're right for here on cheap term life insurance quote. Universal life insurance may also be known as “flexible premium adjustable life.”
It was introduced in the late 70’s and is one of the newer policies.
It is considered flexible premium because you have the option of adjusting the premium to suit your needs! For example, if you are having a very hard time making the premiums you might be able to skip a premium and the policy will not lapse. Please Note: that there needs to be sufficient cash value for you to be able to do this as the premium will deduct from your cash value that you’ve built up, if you choose to do this. It can also affect the rate at which your policy grows.
Also note that it may take a few years to build cash value. You should ALWAYS speak to a licensed professional for advice on what to do during situations like this to prevent any potential problems. The policy is also adjustable because your death benefit (insurance payout) can be decreased or increased depending on your needs at the time.
What is Universal Life Insurance?
About the cash value
After the cost of insurance is deducted, your premiums on your universal insurance are put into an account that accumulates interest. Your insurer will then credit your cash value with the current interest rates (nonguaranteed). It is also backed by a guaranteed rate or the contract rate. So the interest that accrues will never be lower than your guaranteed rate (listed in your contract) but can be as high as current market rates, which will depend on current market conditions. When you build cash value, you also have the option of borrowing from the existing cash value. Contact a friendly agent today to help you decide which policy will be right for you! Put that agent to work to help you find affordable life insurance suitable to your needs.
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