Universal Life

Information about Universal Life Insurance

Universal Life (UL) Insurance is a unique kind of life insurance that is designed to act in the capacities of both a permanent life insurance policy and as an investment tool for those covered. It has more flexibility than most other kinds of life insurance, due to the fact that those covered are able to adjust the term and specific conditions of their insurance as their life circumstances evolve. Basically, universal life coverage can be considered as regular life insurance but with the added bonus of an investment tool being built in.

Though UL is perfect for people who need a regular life insurance policy, when workplaces offer such a policy in place of a standard life insurance policy, they are often snatched up quickly by the same folks. This policy works in a different manner from many other kinds of life insurance. For example, when premiums are deducted, often from an employee payroll, they are added to a kind of cash value fund for the policyholder. Keep in mind that the covered person can eventually utilize interest on accrued principle to pay future premiums, potentially making their monthly premium outlays nothing eventually. They can also opt to pay bigger premiums in order to increase their policy’s cash value. This policy is in effect a cash value investment that can grow quite handsomely over time.

UL insurance can help in a surprising number of ways. The most frequently cited benefit is the ability to cover funeral expenses and to replace lost income for the dependents left behind after a policyholder’s death. The cash value of the policy can also be exploited as a hedging instrument or, in other words, as collateral, as well as capital for investment purposes.

Universal life is not too different from other kinds of life insurance. It does have great flexibility, which most policyholders appreciate. Policies can be changed as does the life of a policyholder. The cash value aspect of the policy can also be terrifically helpful, as it can be put to work paying off premiums, as well as being there and just collecting interest while simultaneously raising the overall value of the policy.