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What are Universal Life Premiums and Polices?

What is Universal Life Insurance?

Universal life is a form of permanent insurance. This type of insurance provides the security of a guaranteed death benefit. However unlike whole life policies, universal life accumulates a return on a portion of the paid premiums. After you pass, the benefit is paid to your beneficiaries tax-free.

One of the many benefits of universal life is its flexibility. Universal life offers a flexible payment policy which allows policy holders to customize their premiums and death benefits year-to-year. However, even with the option to adjust premiums and your coverage needs, universal life is often sold as a level-premium, life-long alternative to term life coverage.

The downside to universal life policies is the premiums are generally higher than premiums for a term life policy. This can be cost prohibitive to families looking for affordable life insurance options. This policy also comes with the risk of lapsing, if the premiums go unpaid or if the cash value of the account is no longer sufficient to cover the cost of the policy.

Due to issues with the policy potentially lapsing, a secondary guarantee can be added to a Universal Life policy. This type of policy will offer a "no-lapse guarantee" so the policy will remain in-force for the guaranteed period as long as the minimum premium payments are made.
Obtaining a Universal Life Insurance Quote
Guaranteed universal life policies are a convenient and reliable form of final expense insurance, which typically have low face value and are purchased to cover the cost of burial and other final expenses.

Universal life insurance has many uses, and can help provide coverage for a variety of situations such as:
  • Final Expenses
  • Estate Tax
  • Charitable Contributions
  • Retirement Income
  • Inheritance
  • Children or Juveniles
  • Special-needs Family Members
  • Small Business Owners
If you are seeking long-term protection in an insurance policy (15 years or longer), universal life may be the perfect type of policy for your needs. On the other hand, if you have no plans to keep your policy long-term, or if you'll have future need for additional insurance for a set period of time (for example to provide protection for a mortgage) you may want to consider term life insurance instead.

IntelliQuote can offer personalized quotes for Universal Life policies as well as help you determine which type of policy best meets your individual needs and requirements. If you would like to discuss your options further, or get assistance with obtaining a free, no obligation quote, please contact our licensed agents at 1-800-963-6405.
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