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Universal Life Insurance

A Primer on Universal Life Insurance


One’s planning for a solid financial future is often put off. As a breadwinner who financially provides for a spouse, children and/or other loved ones, your death can result in financial hardship for those left behind. Universal life insurance is often obtained to provide benefits to these survivors. It is important to note that this kind of coverage is actually categorized as a financial asset as it can increase in value as time goes by.
This type of coverage provides a lifetime of protection to those who obtain it. Some are uncomfortable with the idea of the rates that whole life insurance requires and others may not want to run the risk of outliving the coverage periods of term life. Universal life insurance (UL) can be the answer as it is less costly than whole life and yet more comprehensive than term coverage. It is permanent protection at a sometimes ore reasonable rate. UL also offers flexible premium adjustments, which allows policyholders to sometimes change their rates and t also has a tax-deferred savings component that can grow over time.

Coverage Options

Insurance providers offer several kinds of insurance policies:
Variable UL: This coverage permits investment of a portion of the policy cash value.
Index UL: This provides one with the opportunity to earn income in accordance with the flexible insurance premiums.
Group UL: This is the type provided by one’s employer or union.

The Benefits

The is the best coverage for those desiring life-long protection or who are attempting to save for the future. Business owners looking for a tax-efficient method to protect their business assets may also do well by this coverage. Keep in mind that any withdrawals from the account value are categorized as loans and may accrue interest and reduce one’s death payout as well as lowering the cash value of the policy.
One can adjust the death benefits- If there are reduced, this can help substantially lower the cost of the policy. Conversely, they may also add to the benefits to increase any future pay outs to loved ones upon the policyholder’s death.
Interest can accumulate on the policy cash value. A UL policy’s cash value earns interest based upon the current market rates. The interest rate can decrease depending on the market, but insurance companies sometimes provide protection against this by adding a minimum performance guarantee.


Note that determining rates for this extraordinary coverage will be subject to several factors, such as age, gender, where one lives, his or her occupation, lifestyle, health status and more. Regardless, this coverage can help in assuring both you and your family’s financial health in the future.