Universal Life insurance is an adjustable life insurance policy that has features of both Term and Permanent Insurance. The Term life insurance part provides pure insurance protection and a guaranteed death benefit for the length of time chose. The Permanent part provides cash value that can be used for loans, pay premiums, or increase the death benefit.
Universal life insurance is a permanent morality product that can be used for protection and income. It has a flexible feature that allows the policy owner to modify premium and/or level/increasing death benefit amounts. It generally has two sets of rates in the policy: current company practice and contractual guarantees.
A type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance) which is invested to provide a cash value buildup. The death benefit, savings element and premiums can be reviewed and altered as a policyholder's circumstances change. In addition, unlike whole life insurance, universal life insurance allows the policyholder to use the interest from his or her accumulated savings to help pay premiums.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
Universal life insurance is a type of permanent life insurance program that features a flexible premium structure. It's, in short, a blend between term life insurance and whole life insurance. A universal life policy will guarantee the maximum death benefit for the lowest possible premium (making it much less expensive than a whole life policy with the same death benefit). Like with whole life insurance, universal life will build cash value, although it will generally not accumulate as much cash value over the life of the policy as a comparable whole life policy – it is essentially term insurance to age 121, with the emphasis on a larger death benefit instead of greater cash value.
It's ideal for anyone who wants to maximize the death benefit and isn't worried about building cash value (the carrier takes back the cash value and pays out the death benefit when the insured dies and a claim is made on the policy). You can guarantee benefits for up to age 121 (with most companies) - these policies can be structured to dial down the death benefit to a specific age as well (e.g. to age 90, 95, 100, 105, etc.).
I hope the information is helpful - please feel free to contact me for assistance and if you have any other questions. Thanks very much.
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It's ideal for anyone who wants to maximize the death benefit and isn't worried about building cash value (the carrier takes back the cash value and pays out the death benefit when the insured dies and a claim is made on the policy). You can guarantee benefits for up to age 121 (with most companies) - these policies can be structured to dial down the death benefit to a specific age as well (e.g. to age 90, 95, 100, 105, etc.).
I hope the information is helpful - please feel free to contact me for assistance and if you have any other questions. Thanks very much.