What Is Universal Life Insurance?

Universal Life Insurance is a type of insuranceRealize, however, by doing this, the face amount
policy that not only provides protection in theof the policy will change because the difference
event of the insured's death, but it also serves asbetween the minimum monthly premium and the
an investment option. It may earn money marketlower amount you pay is taken from the policy
interest rates. It's flexible and allows you tocash value. Be aware that most companies, if not
increase or decrease the amount of insuranceall, include an expense charge for each premium
coverage you need throughout the policy term.payment.
Although it is flexible, there are certain• Withdrawals - You may withdraw
parameters you must follow. The policy limit maymoney from the cash value of the policy.
not be decreased beyond a predeterminedCompanies may have limits as to how many
amount, and increasing the coverage may subjectwithdrawals you may take each year and what
you to underwriting requirements. Always bethe minimum amount can be. Each withdrawal
aware of your policy's terms and conditions.may be subject to fees or charges.
How does it work?Rates:
With a Universal Life policy you are in control ofRates vary depending on the company. Some
the amount and how often you pay thecompanies guarantee that the account value will
premiums.earn interest at the company's current interest
• You have the option to make lumprate. Other companies have come out with
sum payments which will increase the cash andpolicies where rates are guaranteed, regardless of
death benefit value of your policy. The interest onthe interest rate the insurance company pays.
the cash value of the policy grows tax-deferred.The best advice is to shop around and always
• You may also, at times of financialknow what's in the fine print.
hardship, lower the premium amount you pay.