Universal Life Insurance

Universal life insurance is a form of permanent or whole life insurance offering the security of a guaranteed death benefit. Like whole life insurance, universal life policies accumulate tax-advantaged savings, or cash value, which is a return on a portion of your paid premiums invested by the insurance company. At your death, the benefit is paid to your beneficiaries tax-free.

Comparing Benefits & Disadvantages of Universal Life

Universal life is a flexible permanent policy that allows you to customize your premiums and death benefit from year-to year.

Though you have the option to adjust premiums and increase* or decrease the death benefit depending on changes to your coverage needs, universal life is often sold as a level-premium, life-long alternative to term life insurance.

However, premiums for universal life insurance are generally higher than premiums for a term life policy, which can be cost prohibitive for those just starting out. There is also a risk of the policy lapsing if the premiums are not paid or if the cash value of the account is no longer sufficient to cover the cost of the policy. *Note: Increases to the death benefit are subject to insurability.

Guaranteed Universal Life Insurance

A secondary guarantee can be added to a universal policy to avoid the cash value lapse issue. A guaranteed universal life policy includes a ‘no-lapse guarantee’ where the policy will remain in-force for the guaranteed period as long as minimum premium payments are made.

Guaranteed universal life policies have become a convenient form of final expense insurance. Also known as ‘funeral’ insurance, final expense policies typically have a low face value and are purchased to cover the cost of burial and other final expenses. These policies are typically available for issue up to age 75-90, assuring coverage for those who don’t want their loved ones to shoulder the financial burden of a funeral in their time of grief.

Uses For Universal Life

Universal life insurance can help provide coverage for:

• Final expenses
• Estate tax
• Charitable contributions
• Retirement income
• Inheritance
• Children or juveniles
• Special-needs family members
• Small business owners

Is Universal Life Insurance Right For You?

If you’re in need of a life insurance policy for long-term protection (15 years or longer), universal life may be the type of policy that’s right for you. If you don’t plan on keeping your policy long-term, or if you know you’ll have a need for additional insurance for a set period of time only (such as to provide protection for a mortgage), you may want to consider term life insurance instead.

For a personalized quote on a universal life insurance policy – including final expense, children’s or small business owner’s insurance – call one of our licensed agents at 1-800-963-6405.