Reader’s Question:

I’m interested in getting universal life insurance coverage, is this a good policy? What would be the advantages of this kind of policy?

Hans

Carson, CA

A universal life insurance policy is one of the most interesting types of coverage available. Like all types of permanent life insurance, universal life (UL) has a cash-value feature, where premiums in excess of the insurance costs (e.g. basic insurance charge, fees, other policy charges) are credited and accumulate interest and value in the long run.

Should You Go With Universal Life?

The main difference with this type of coverage is that your cash-value, in order to grow, is placed in many different investment options. This can include stocks, equities, bonds, and mutual funds. In fact, UL is a sort of mutual fund itself and interests may vary depending on what market index is used. So as you can see, this type of life insurance can work very well for someone who has at least a good knowledge of financial investments.

Another advantage of owning universal life is that if you have enough cash-value built up, it can be used to pay your premiums in the case you are unable to. As long as the cash-value is available to cover the basic insurance costs then the policy will stay in-force. Also, you are able to grow your wealth within the policy without being taxed.

The Verdict

If you are interested in having control and flexibility over how your money grows within a permanent life insurance plan and have good knowledge of investing then universal life insurance is for you. You can get and compare the latest universal life insurance quote and offers by using lie insurance comparison websites (like this one) to run free rate quote checks as well.