Universal Life

Universal Life Insurance Policies

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What is Universal Life Insurance?

Universal life insurance is a form of life insurance with a bonus. It is a permanent life insurance policy, but it also serves as an investment for the policyholder. The policyholder can adjust the terms and specifications of the policy. Other policies aren’t that flexible. With universal life, the policyholder can make changes that benefit them and their family.

The main purpose of universal life insurance is to act as life insurance for the policyholder. The benefits are paid to the policyholder’s beneficiaries upon the death of the policyholder. These funds can pay funeral expenses or replace income for dependents. The cash value of the policy can also used as collateral, and as capital for investments. Other forms of life insurance don’t offer this benefit.


How it Works

As mentioned earlier, this type of policy is slightly different from other insurance policies.

When the policyholder pays premiums, the premiums are pooled in a sort of cash value fund for the policyholder. The policyholder can adjust their interest and principal amounts in order to use the interest to pay future premiums. They can also adjust the policy so they pay higher premiums and accumulate more interest for their policy’s cash value. This type of policy is a cash value investment. Even if the policyholder cancels the policy, the interest could have grown into a large investment.


Benefits

Most people like universal life insurance because of its flexibility and investment options. If you’re interested in investments, then this type of life insurance is probably right for you. It’s also beneficial that you, as the policyholder, can benefit from this while you’re still alive. Then when you die, your beneficiaries still get the benefits.



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