Universal Life Insurance is a type of permanent life insurance that combines the affordability of term life coverage with a cash value savings component, similar to whole life insurance. What sets it apart is the flexibility it offers in both premiums and benefits.
1. Flexible Premiums and Coverage
Universal Life policies allow you to adjust your premiums and death benefit as your financial situation or coverage needs change. You’re not locked into fixed payments — you can increase, decrease, or even skip premiums if your policy’s cash value can cover them.
2. Cash Value Accumulation
Part of your premium goes into a cash value account that grows over time. This savings element earns interest at a variable rate that’s adjusted monthly. You can borrow from or withdraw this cash value for personal needs like college tuition, emergencies, or even to supplement retirement income.
3. Interest Can Help Pay Premiums
If your cash value has grown significantly, the interest earned can be used to help cover future premium payments — reducing the out-of-pocket cost to you.
4. Monthly Adjustments
Unlike whole life insurance, which offers a fixed rate of return, universal life insurance adjusts the rate of return on your cash value every month. This gives your policy the potential to grow more aggressively — though with some risk of lower returns in down markets.
Universal Life Insurance offers flexibility and long-term growth potential that appeals to people whose financial goals or circumstances may evolve over time. It’s ideal if you want lifelong coverage with the ability to adapt your policy to changing needs.
Let us help you decide if Universal Life is the best fit for your goals — contact us to learn more.
This Medicare information section is here to educate you about your insurance options and provide you with the resources you need to help you select the right plan for your unique needs.
If there’s anything you need or if you have any questions, please feel free to contact us. We are here to help.