Universal Life Insurance

There are several benefits associated with purchasing a universal life insurance policy, and you may discover that this is the type of coverage that you want to invest in after you have taken a closer look at what it offers. Because this is a popular type of coverage that is also viewed as an investment, it is commonly included in workplace benefits by employers. However, you can also purchase a policy on your own through an insurance company.

Generally, a universal life insurance policy is one that offers death benefits for the stated value upon the death of the beneficiary. In this way, it acts as typical coverage. However, it also has the unique ability to accumulate cash value over time. A portion of each of your premium payments will be applied toward your cash value. This balance will also generate interest over time. It essentially is an asset, and you may be able to borrow against the cash value or pull it out of your account at any time. This money may be used for any purpose that you desire, such as home improvements, putting the kids through college, taking a vacation or something else. You do not have to apply or qualify to access the funds because it is your money. Keep in mind that this asset will continue to accrue value through interest charges as long as the balance remains untouched. Because of this, some people will use it as part of their retirement plan. Others will never use the money, and they will pass it on to their heirs as a legacy.

As you can see, there are two unique benefits associated with this type of coverage. The downside associated with it, however, is that the premium amount may be higher than other options. This is because of the portion of premium that is applied toward the cash value of the policy. In this way, you are not losing money. Instead, you are simply depositing some of your money into the account regularly with each premium payment. Now that you know more about how these policies work, you may be ready to apply for coverage.