Universal Life Insurance

For those who are looking for an alternative policy to term life insurance that offers a little more than straightforward coverage, universal life insurance is a good option. Universal life insurance provides beneficiaries with flexibility and a cash value component that other plans don’t have. Since the policy extends throughout the entire life of the policyholder the cash value can continue to increase over time. At the time of passing, the total payout to your beneficiaries is in a tax-free lump sum known as the death benefit. One benefit that many people take advantage of is that you can use the cash value of the policy to pay the monthly premiums. It is important to note that the interest rate earned on the cash value can change, unlike other policies.

Universal life insurance historically hasn’t been the most common type of life insurance among consumers. Generally speaking, the plan is more suited for people with specific needs. For example, someone with a high net worth can use the policy to take advantage of the tax-deferred savings component. Another example where the universal life policy would be beneficial would if there was a child with special needs and the associated care costs were high.