Universal Insurance
Universal life insurance is a type of permanent life insurance that offers flexibility in premium payments and death benefit amounts. With universal life insurance, the policyholder can adjust the premiums and death benefit over time, as their needs change. This type of insurance also has a cash value component, similar to whole life insurance, that grows over time and can be used to pay premiums or withdrawn as cash. Universal life insurance can be a good option for those who want permanent coverage with the ability to adjust the policy as their financial situation changes.
Quick overview of insurances
Term
Is simple and popular. It provides life coverage and pays a sum assured to your dependents upon your passing, as long as premiums are paid on time.
Provides a larger death benefit without accumulating cash value.
Initially, a less expensive form of life insurance.
Universal
UL insurance provides flexibility with premiums and cash value. Payments can be adjusted or skipped without risking policy lapse.
Your policy can be adjusted to increase or decrease the death benefit, potentially requiring a medical exam for increases. Lowering the death benefit can help reduce premiums.
UL insurance accumulates cash value with interest based on the market or a minimum rate. Policyholders can access the cash value through withdrawals or loans.
Whole Life
As with all permanent insurance, whole life insurance provides coverage until the insured’s death.
It can be renewable or convertible.
UL policyholders can borrow against the cash value without tax implications or credit checks, but unpaid loans reduce the death benefit.
Part of each premium payment accumulates as cash value, which you can withdraw or borrow against during your lifetime.
Your death benefit is established when you sign up for your policy and stays the same while the policy remains active.
While withdrawals of more than you’ve contributed to the cash value are taxed, policy loans are not.
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Flexibility
Cash Value Growth
