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Permanent Coverage with the Flexibility Life Demands

Universal Life Insurance

Adapt your life insurance to your changing world. Adjust your payments and coverage to meet your financial needs.

Frequently asked questions

What is Universal Life Insurance and How Does It Work?

 

Universal Life (UL) insurance is a type of permanent life insurance that combines a death benefit with a cash value savings component, all wrapped in a flexible package.

Its key feature is its adaptability:

  1. Flexible Premiums: Unlike whole life, you can adjust the amount you pay into your premium. You can pay the minimum to keep the coverage active, or pay more to build your cash value faster.

  2. Adjustable Death Benefit: You may have the option to increase or decrease your death benefit as your life circumstances change.

  3. Cash Value Growth: Your cash value grows based on current interest rates, and you can access this money during your lifetime.

This flexibility makes it a powerful tool for those whose income or financial needs may change over time.

 

Key Benefits & Potential Drawbacks

 

  • Benefits:

    • ✅ Unmatched Flexibility: Adjust payments and coverage to fit your budget and life events.

    • ✅ Permanent Coverage: Like whole life, it's designed to last your entire lifetime.

    • ✅ Potential for Greater Cash Value Growth: Cash value growth is tied to market interest rates, so it could grow faster than whole life (though this is not guaranteed).

    • ✅ Tax-Advantaged: Death benefit is tax-free, and cash value grows tax-deferred.

  • Drawbacks:

    • ❌ More Complex: The moving parts (flexible premiums, non-guaranteed interest rates) make it more complicated than whole life.

    • ❌ Requires Monitoring: If you only pay the minimum premiums, or if interest rates fall, your policy could lose value or even lapse if not managed properly.

    • ❌ Higher Cost: It is a form of permanent insurance, so it is more expensive than term life.

 

Who is Universal Life Insurance Best For?

 

Universal life is ideal for:

  • High-Income Earners with Fluctuating Income: Such as business owners or sales professionals who want to over-fund the policy in good years.

  • People Seeking Flexibility: Individuals who want permanent coverage but need the ability to adjust their payments in the future.

  • Those Needing an Adaptable Estate Plan: Who may want to adjust their death benefit as the value of their estate changes.

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