Example: You would be able to increase your life insurance coverage later in life. Life insurance benefits can increase without increasing the premium,
by having more of the premium going for insurance, and less going toward a separate cash account (which will be discussed later).
However if you significantly increase the amount of your death benefit, your insurer for universal life insurance may require a medical exam to
determine if your health has gotten appreciably worse. Of course, the reverse can be true. After your no longer need a large life insurance benefit, you
can have less life insurance and more of the premium can go toward the separate account.
In addition, if you are unable to pay the premiums on your policy, you may be able to lower your premiums so that you are just paying for the insurance
and not having any money going into the separate account. In addition, you may also be able to have the money that has accrued in the separate
account pay the premiums on the life insurance until you are able to pay the premiums yourself. This flexibility can be important to insure that you keep
your life insurance active and in force. A universal life insurance policy can help to protect against losing life insurance coverage.
Using the Cash Account
It is possible to draw out the funds that have accrued in the separate cash account to use for higher education expenses, during times of financial
instability, or for any other reason. The one drawback, however, is that most insurance companies do charge a fee for taking this money. In addition, if
parts of your premium are from the separate account, then taking too much money can cause the premiums you pay into the policy to go up. If you are
unable to pay the increased premiums of your universal life policy, then you risk having the policy canceled. In addition, any money that you take from
a universal life policy will have to be paid back. Otherwise, you will lower the overall death benefit of the policy.
If you need to access your cash value, you have a couple of options. You can “borrow” your own cash value by taking a policy loans. These loans are
generally not taxed as long as your policy stays in force. You can even withdraw money from this cash value without taxes as long as the total amount
of money you withdraw is not greater than the total premiums you have paid. Be aware that any loans and withdrawals may generate an income tax
liability, reduce available cash value, reduce the death benefit or cause the policy to lapse.
Conclusion
Universal Life Offers:
For some people, they buy a universal life policy to build-up cash value, then to take it, as they get older. These people do not mind having the deathbenefit decreased substantially because they were using the policy almost like a savings account with the added feature of life insurance. Others,
however, use it to build up a death benefit plus extra cash value to go to their loved ones with the die.
For whatever reason you may purchase a universal life insurance policy, there is flexibility. The key, however, is to talk with a licensed life insurance
professional to make sure that a universal life insurance policy and its options are what is needed for your own situation.
by having more of the premium going for insurance, and less going toward a separate cash account (which will be discussed later).
However if you significantly increase the amount of your death benefit, your insurer for universal life insurance may require a medical exam to
determine if your health has gotten appreciably worse. Of course, the reverse can be true. After your no longer need a large life insurance benefit, you
can have less life insurance and more of the premium can go toward the separate account.
In addition, if you are unable to pay the premiums on your policy, you may be able to lower your premiums so that you are just paying for the insurance
and not having any money going into the separate account. In addition, you may also be able to have the money that has accrued in the separate
account pay the premiums on the life insurance until you are able to pay the premiums yourself. This flexibility can be important to insure that you keep
your life insurance active and in force. A universal life insurance policy can help to protect against losing life insurance coverage.
Using the Cash Account
It is possible to draw out the funds that have accrued in the separate cash account to use for higher education expenses, during times of financial
instability, or for any other reason. The one drawback, however, is that most insurance companies do charge a fee for taking this money. In addition, if
parts of your premium are from the separate account, then taking too much money can cause the premiums you pay into the policy to go up. If you are
unable to pay the increased premiums of your universal life policy, then you risk having the policy canceled. In addition, any money that you take from
a universal life policy will have to be paid back. Otherwise, you will lower the overall death benefit of the policy.
If you need to access your cash value, you have a couple of options. You can “borrow” your own cash value by taking a policy loans. These loans are
generally not taxed as long as your policy stays in force. You can even withdraw money from this cash value without taxes as long as the total amount
of money you withdraw is not greater than the total premiums you have paid. Be aware that any loans and withdrawals may generate an income tax
liability, reduce available cash value, reduce the death benefit or cause the policy to lapse.
Conclusion
Universal Life Offers:
 | Flexible premium payments | |
| Guaranteed death benefit protection on some policies | |
| Potential “savings” feature from which loans and/or withdrawals can be taken | |
| Tax-advantaged cash value accumulation potential | |
| Income tax-free death benefit |
For some people, they buy a universal life policy to build-up cash value, then to take it, as they get older. These people do not mind having the death
however, use it to build up a death benefit plus extra cash value to go to their loved ones with the die.
For whatever reason you may purchase a universal life insurance policy, there is flexibility. The key, however, is to talk with a licensed life insurance
professional to make sure that a universal life insurance policy and its options are what is needed for your own situation.
Universal life insurance is a more permanent type of insurance offering
for people looking for long term insurance coverage. Universal Life,
also called UL, offers a great deal of flexibility over term insurance.
Many of today’s universal life policies also offer guaranteed lifetime
protection to help you protect your loved ones against financial
hardship if you die. As long as your premiums are paid, your policy will
remain in force no matter how long you live. Some life insurance
policies without this feature only pay a death benefit until a certain
age, like age 100.
How Universal Life Insurance is Flexible
Universal life insurance policies have become so popular over the last
years because of its flexibility. For instance, after you make your initial
payment, you are able to increase or reduce your death benefit
amount. As long as you do not miss any payments, you can pay
premiums in any amount and at any time.
for people looking for long term insurance coverage. Universal Life,
also called UL, offers a great deal of flexibility over term insurance.
Many of today’s universal life policies also offer guaranteed lifetime
protection to help you protect your loved ones against financial
hardship if you die. As long as your premiums are paid, your policy will
remain in force no matter how long you live. Some life insurance
policies without this feature only pay a death benefit until a certain
age, like age 100.
How Universal Life Insurance is Flexible
Universal life insurance policies have become so popular over the last
years because of its flexibility. For instance, after you make your initial
payment, you are able to increase or reduce your death benefit
amount. As long as you do not miss any payments, you can pay
premiums in any amount and at any time.
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