Universal Life Insurance

WHAT IT IS

It has both an investment component and a protection component, which provide financial security in the event of death or disability. The cash value of the policy can also be used as an income stream during retirement.

With Universal Life Insurance, YOU choose how much you pay. This amount is called your “planned premium”. However, there is a required amount of premium that must be paid for the coverage to take effect when the policy is first issued.

One of the key features of universal life insurance is its cash value component. As policyholders make premium payments, a portion of that money goes into a cash value account, which grows over time. This cash value can be accessed by the policyholder through withdrawals or loans, providing an additional source of funds that can be used for any purpose, such as paying off debts, funding a child’s education, or supplementing retirement income.

Another advantage of universal life insurance is its flexibility in premium payments. Policyholders can choose to pay the minimum required premium to keep the policy in force, or they can contribute more to build up the cash value at a faster rate. This flexibility allows individuals to adjust their premium payments based on their financial situation, making it a valuable tool for those with fluctuating incomes or uncertain financial futures.

In addition to the flexibility in premium payments, universal life insurance also offers the option to adjust the death benefit amount. This means that policyholders can increase or decrease the amount of coverage as their needs change. For example, if a policyholder gets married or has children, they may choose to increase the death benefit to provide more financial protection for their loved ones. Conversely, if their financial responsibilities decrease over time, they can decrease the death benefit to lower the cost of the policy.

WHY IT IS USEFUL:

-You choose how much you pay in premiums

-You can access your cash value account to use as you wish

-Premium payment flexibility

-Ability to adjust the death benefit amount as needed

If you choose a universal life policy, you will need to review your policy annually. Each year, you will receive an annual statement which will show your current cash value and lets you know if you are paying enough premium to keep the policy in force.

Overall, universal life insurance offers a unique combination of flexibility, savings, and protection. It allows individuals to adapt their coverage to meet their changing needs, while also providing a way to accumulate cash value that can be used during their lifetime. Whether you are looking for a policy that can grow with you or a way to build up savings for the future, universal life insurance may be the right choice for you.