Universal Life Insurance Overview
The purchase of life insurance can at times seems overwhelming due to the several options that are put before us and the pluses and minuses of each. However, for those who have done their homework and have taken a closer study of what good universal life insurance can offer will likely make that final decision to buy this particular kind of coverage. Universal coverage stands alone in its provision of both the typical death benefits as with other forms and its built-in mechanism to accumulate cash value over time.
What it does
The death benefits and premiums of universal life insurance stay in place until the policyholder dies or until he or she terminates the policy. This is a big plus for those who might be concerned about premium payments increasing as they move into their elder years and universal life policies lock that in. It’s about stability and flexibility, which Universal Life affords to those who carry it.
This kind of insurance is considered by many to be a true asset as opposed to other forms of more basic life coverage because it has the ability to accumulate monetary value over the years. With each premium payment made, some of it is applied to this cash value, which, again, grows over time and is compounded by the accumulation of interest as well. Once equity is gained in the policy, it can then be either withdrawn or even borrowed against as needed by the policyholder as he or she sees fit. For instance, some might choose to use this equity to pay for a grandkid's college while others might opt to exploit some of it to pay for retirement or to mitigate accumulated debt.
Universal Life is essentially a specialized policy that you keep in place for your entire life. It has great flexibility in that it can be exploited for both death benefits and as an asset that can grow substantially. Keep in mind that, when purchasing this coverage, your health status and age, along with the desired level of death benefits will all be contributing factors to a number of premiums to be paid.