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Universal life insurance is a flexible and versatile type of permanent life insurance that combines a death benefit with a savings component. Unlike whole life insurance, universal life policies allow policyholders to adjust their premiums and death benefits within certain limits, providing greater control over the coverage and cash value accumulation. The savings component earns interest based on market rates or a declared rate, which can grow tax-deferred over time. Policyholders can access the cash value through loans or withdrawals, making it a useful resource for funding major expenses, such as education, home purchases, or emergencies. This flexibility makes universal life insurance an attractive option for individuals seeking lifelong protection along with the ability to adapt their policy to changing financial needs and goals.

WHAT ARE THE BENEFITS OF UNIVERSAL LIFE INSURANCE?

Universal life insurance offers a range of benefits that make it an attractive option for those seeking comprehensive financial protection and flexibility. Here are some key advantages:

  • Flexibility in Premiums

  • Cash Value Accumulation

  • Access to Cash Value

  • You have flexibility with premiums.

  • Flexible Death Benefit

  • Long Term Security

Since a universal life insurance policy’s premiums are split between the cost of coverage and the cash value, you can choose how much you pay so long as it falls between the minimum and maximum premium amounts. Many people choose to pay the maximum premium possible for the first several years of coverage in order to build a large cash value, then use the cash value to pay premiums later on. 

A universal life insurance policy’s cash value can be used as:​

  • Surrender Value - If you decide that you no longer want the policy, you can give it back to the insurer (“surrender” it), and the insurer would give you the cash value in return.

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  • Loan Collateral - You can borrow money from the insurer and use the cash value as collateral, so that’s the maximum amount you can borrow. These policy loans are subject to interest rates which are set by the insurer.

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  • Premium Payments - You can use the cash value to pay a portion or the entirety of a premium payment. Just keep in mind that policies will lapse if the cash value drops to zero, so you have to keep close track of the amount.

To ensure you get the coverage you want and need to protect your family, your home, and your future, having the ability to make informed choices is essential. A universal life insurance policy offers you this flexibility, allowing you to select and maintain the coverage that aligns with your needs, for as long as you require it. Ready to get started? Schedule a free consultation today!

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