Universal Life Insurance

Life insurance is one financial service that practically everyone will need to think about at some point. This form of coverage will protect your family and loved ones if you pass away, but many are unsure of what type of policy will best suit their own needs. Here is a closer look at universal life insurance, one of the most popular options for long-term coverage and protection.

The Basics of Life Insurance

There are many forms of life insurance, but universal policies are the only type of coverage that will extend throughout one’s life. Also referred to as permanent life insurance, this coverage will stay intact as long as the premiums are paid. This is an alternative to term policies that are generally only active for a period of around 20 years.

Anyone that has family members or loved ones financially dependent on them should consider some form of life insurance. These policies can provide financial assistance for funeral services, mortgage payments, college tuition, and any other expenses that will occur after one’s death.

An Investment

What many people do not realize is that permanent life insurance is also an investment. Almost all universal policies will allocate a portion of one’s premiums to an investment portfolio, and most insurance providers guarantee a specific amount of interest that will be made. As the policy continues to grow, these accounts can be considered a form of savings. The policyholder can make withdrawals from the account (taxes may apply) or borrow against it for larger purchases such as a home.

The Benefits of Permanent Coverage

Those that are not able to pay their premiums in the future might have enough value in the account to cover the premiums until they are able to pay once again. This sort of security is unique to universal policies and will prevent an individual from losing coverage at an inopportune time. Policyholders also have quite a bit of flexibility when it comes to their premiums. As time goes on, they can opt to pay more or less depending on their financial situation and how much they would like to invest.