Universal Life Insurance

Universal life insurance is a flexible option that provides lifetime coverage and combines protection with an investment savings component.

It also offers a cost advantage similar to term life insurance, making it an appealing choice for permanent coverage.

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What is Universal Life Insurance?

Universal life insurance offers a versatile alternative for those seeking lifetime coverage. As a form of permanent insurance, it combines protection with an investment savings component. Notably, universal life insurance shares a cost advantage with term life insurance, making it an attractive choice.

Utilizing the Benefits

Cash Value Component:

Universal life policies include a cash value component that grows over time. This cash value can be used for various purposes, such as accumulating savings or supplementing retirement income.
You can access this cash value through withdrawals or policy loans. Keep in mind that outstanding debts or withdrawals will be deducted from the payout to your beneficiaries upon your passing.

Customizable Riders:

Enhance your universal life plan by adding riders. These optional extras provide additional coverage and benefits at a minimal extra cost.
Common riders include critical illness coverage, disability protection, accidental death benefits, term insurance riders, and premium waivers. The specific options vary by insurance company.

Lifelong Protection:

As long as you pay your premiums, universal life insurance protects you throughout your lifetime. Adjust your premium payments and death benefit according to your changing needs and financial situation.

Benefits of Universal Life Insurance

Flexible Payment Schedule

Unlike whole life policies with fixed premiums, universal life insurance allows payment adjustments within policy limits.
While paying less now may lead to higher costs in the future, this flexibility makes maintaining your coverage easier over time.

Tax Advantages

The interest earned within your universal life insurance account is tax-deferred.
Keep in mind that tax implications arise when you withdraw funds from the policy. Consult your tax and financial advisors before making any changes.

Accessing Funds

You can borrow from the tax-free cash value of your insurance.
If you pass away before repaying the loan, the outstanding amount is deducted from your death benefit.
Surrendering the policy provides a cash surrender value after deducting any surrender charges.
Keep in mind that there could be tax implications.