Universal Life Insurance
Contents
What is universal life insurance?
Cash value in universal life insurance
Who should buy universal life insurance?
What’s next?
What is universal life insurance?
Universal life insurance is one of two main varieties of permanent life insurance.
Whereas the other variety, whole life insurance, is characterized by its uncompromising guarantees, universal life insurance is characterized chiefly by its flexibility, which makes it a more useful investment vehicle. The death benefit, premiums, and cash value are not guaranteed at a certain amount but remain perpetually adjustable in the hands of the policyholder. (Read “Flexibility in universal life insurance” for greater detail.)
(For maximal flexibility, learn about variable universal life insurance.)
Cash value in universal life insurance
All permanent life insurance policies contain "cash value" component, an interest-bearing account at the policyholder’s disposal. Two things set a universal policy’s cash value apart from a whole life policy’s:
- Cash value is structurally the core of a universal life insurance policy.
- In addition to the methods of cash value access which whole life insurance affords, universal life insurance permits a direct cash withdrawal.
(Read “Cash value in universal insurance” for greater detail.)
Who should buy universal life insurance?
Universal life insurance may be used for a myriad of purposes. Popular uses include but are not limited to:
- A tax-advantaged investment vehicle.
- Protecting a business (as upon death of owner).
- Protecting an estate against liquidation (to pay estate taxes).
- Funding a retirement plan.
Now let’s make the question a bit simpler: why purchase universal insurance instead of whole life insurance?
- Flexibility—You have power to restructure your policy throughout its lifetime. It is, consequently, your responsibility to monitor it to ensure its sustainability. (If you prefer a policy which requires minimal attention, buy whole life insurance or term life insurance.)
- Transparency—Other life insurances remove a single, undisclosed policy fee from each premium. Universal life insurance itemizes its charges so you can see where each dollar goes.
- Affordability—Universal life insurance is generally more affordable than a comparable amount of whole life insurance.
What’s next?
You have several options at this point:
- Begin shopping for universal life insurance now by calling us at 1-800-823-4852 to receive universal life insuranec quotes.
- Get shopping assistance by visiting our online Life Insurance Information Library or by calling 1-800-823-4852 to speak with an advisor. (click here)
- Compare what you’ve learned about universal life insurance with whole life insurance and term life insurance.
