Introduction to Universal Life Insurance
Buying good life insurance coverage can perhaps become challenging for many as it is an acknowledgement of mortality for one and it is also made all the more bit difficult by the many options that are available to us with the inherent pros and cons of each. However, if you have taken the time to do the proper research into what good universal life insurance can provide, it is quite possible that this will likely be the kind of coverage chosen. Universal coverage is unique in its provision of both the standard death benefits found with other kinds of insurance along with its innovative built-in mechanism to accrue cash value over time.
How it works
The death benefits and premiums of universal life insurance coverage remain in effect until the policyholder dies (or until he or she stops paying for the policy). This is one of the ways this coverage is distinguished and can be a selling point for people who may have concerns about premium payments increasing as they grow older. Universal life policies lock in premium rates and this means that one can enjoy a sense of stability along with policy flexibility, which universal life provides to those who chose it.
This type of insurance is often deemed as an asset, which is quite a departure from other forms of more standard life insurance. This coverage has the ability to grow in monetary value over the years. With each premium that is paid, a portion is applied to the overall cash value, which can accumulate handsomely over time. In addition, this asset is compounded by the interest earned as well. And, as an added bonus, once equity is achieved in the policy, money can be withdrawn or even borrowed against as the policyholder so chooses. For example, one might opt to use this equity to pay for a child's college education while others may chooses to utilize some of it to pay for retirement or to eliminate outstanding debt. This is the aforementioned flexibility that is inherent in this kind of policy.
Universal Life is basically a specialized coverage that you have in place for your entire lifetime. It has great flexibility in its death benefits and its asset growth. When purchasing this coverage it is important to remember that your health and your age, along with the desired level of benefits will all be considered as factors in determining to the amount of premiums that will be owed.