Universal life insurance combines flexible premiums with a savings and investing component that can grow the policy's value over time.
Universal life insurance pairs premiums with a savings and investing element that can potentially raise its value over time.
Universal life policies are a form of permanent life insurance, which means that as long as you keep up with your monthly premiums, your death benefit stays covered.
Premiums are the monthly payments you're required to make for as long as the plan is active. This stretch is called the accumulation phase of the policy—the time before the policyholder passes away and the death benefit is paid.
The death benefit of a universal life policy is the sum of money paid to the beneficiaries you've chosen when the policyholder dies. That payout runs anywhere from $250k to over $1 million.
A notable feature of a universal life policy is its cash value. This sets aside a small slice of your premium and invests it into either the company's portfolio or your own, with the potential for untaxed growth.
What universal life costs comes down to personal factors like age, health, and sex. Premiums are flexible and can shift depending on the policy, but generally they run higher than other policies such as whole and term life because of the investing component.
Universal life premiums are higher than those of other policy types owing to its investment and cash value component. At first glance, that sounds like a drawback rather than a benefit. However, both these premiums and even the death benefit itself can be adjusted.
You can raise, lower, or halt premium payments entirely as needed. If you make large enough premium payments for a sufficient stretch of time, you may be able to finish paying off your plan sooner, or you can pause paying it for a while (after having made payments for at least a certain period) if you hit tougher financial times.
Universal and whole life policies are both a form of permanent policy. Rather than having to renew after a span of 10-30 years, you can hold a permanent plan right up until the day you pass away, provided you keep current on your premiums.
Universal life is more flexible than whole life. You have the ability to adjust premiums and gain a slightly different investment component—driven by the market instead of interest earned in savings—which offers the chance to grow your cash value and alter your death benefit.
Quottes offers life insurance advice unlike any other. With our expertise, you'll make a decision for your future that's not only well-informed but confident. To get started, give us a call today.
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