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Universal life insurance policies offer flexibility – and part of the cash value.

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If you have a spouse, child or other loved one who depends on your income, life insurance May have smart protection. With these policies, your beneficiaries will receive a lump sum payment when you die, ensuring they have the funds to pay bills, go to college, or handle any other expenses they may incur after your death.

But not all Life insurance policy Equals are created, and actually are many kinds You may consider, including Term life insurance, Whole life insurance and universal life insurance.

If you’re in the market for life insurance, start by getting a free price quote so you know exactly what to expect.

Here’s what you should know about universal life insurance – and how it can benefit you.

What are the benefits of universal life insurance?

There are many benefits of getting universal life insurance. These include:

  • Flexibility: If you want to reduce your premium over time, you can, or if you see the need to take cash on line, you can also borrow against the policy.
  • affordability: They tend to be less expensive Saves you money in the long run, compared to a whole life insurance policy.
  • Longevity: Universal life insurance policies are permanent, meaning you are covered for life.
  • Forced savings: All universal life insurance policies have a cash value account, which allows you to save money and grow your fund over time.

Universal life insurance also comes with some tax benefits. For example, any growth in cash value accounts is tax-deferred and beneficiaries pay no income tax when they receive their death benefits.

If this sounds like a type of coverage that would benefit you, start by getting a free price estimate to see if it makes sense for you.

What is universal life insurance?

Universal life insurance is a type of long term insurance. It offers lifetime protection and tends to be the most flexible option when it comes to life insurance.

All universal life insurance policies have a Part of the cash value (similar to a built-in savings account), which earns interest and grows over time. Once that cash value reaches a certain point, you can borrow against the policy or Use balance To reduce your premium, increase your death benefit or even stop payments altogether.

How does universal life insurance work?

With universal life insurance, you pay premiums, part of which goes towards your death benefit and the other part towards your cash value account. When the value of that account reaches a certain threshold, you’ll be able to tap into it to pay your premium, reduce your premium, or increase your death benefit.

Once you pass, your beneficiaries will receive a payment based on the policy and cash value account balance. They will not pay income tax on this amount and can use the funds as they see fit.

Other considerations

There are downsides, though, and in some cases, other types of policies — such as term or whole life insurance — may be better.

Disadvantages of universal life insurance include:

  • It is not guaranteed: Your cash value account is not guaranteed to grow, as with some other life insurance types. Also there is no guaranteed benefit to the beneficiaries.
  • Risks may include: If you do, stopping monthly payments and relying on your cash value account can be risky. If you exhaust your account balance, your policy may lapse.
  • The benefits are not as great as other policies: Term life insurance policies offer the most bang for your buck, in terms of benefits. So, if you want to maximize the benefits your loved ones receive, universal life insurance may not be the best choice.
  • hands: With universal life insurance policies, you need to actively monitor your cash balance, especially if you are using account cover premiums. Otherwise, you may exceed your account balance and your policy may lapse.

The right type of life insurance policy depends on your age, health, budget and goals. Get a personalized free price quote now or simply start shopping providers using the table below

How much do universal life insurance policies usually cost?

As with any insurance policy, universal life insurance costs vary Based on many factors. Your age is the biggest influencer, with costs increasing as you get older, but other details such as your health, your smoking habits and the size of the death benefit also play a role.

It’s always smart to shop around when getting a new insurance policy, as premiums and coverage options can vary quite a bit. You can get quotes directly from the insurance company or work with an insurance broker, who can help you compare options from different insurance providers across the country.

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