Universal Life Insurance
Universal life insurance is an option if you want a policy that offers a death benefit and allows access to cash before you die. This coverage is more expensive than some other policies, but less expensive than whole life. The flexible policy offers you a lifelong savings option of a whole life policy combined with the low cost of term life coverage.
Universal life also provides options in terms of adjusting premiums, payment terms and death benefits. It’s possible that your employer might offer this as a benefit. Some employees like it because it has a savings component that increases in value on a tax-deferred basis. The premiums are invested in stocks, bonds or money market accounts. The investments earn interest and you are guaranteed a return on your money.
Universal life policies are similar to other life insurance policies. They pay a death benefit upon the policyholder’s death. But with universal coverage, you can borrow money from the policy. The policy is basically split into two components: the life insurance policy and the savings account. A portion of the premiums you pay go towards the life insurance policy, and what remains goes into the savings account.
You can pay a small premium and increase them after 15 years. You can also pay a higher premium and be guaranteed the life insurance and a savings until you’re 100. In any case, this policy is a good option if you also want an investment opportunity.