Life changes. You get married, you need life insurance. You have kids, you need more insurance. Suddenly the kids are all grown up and the mortgage is paid off. Now, maybe you don’t need as much coverage as you used to. It’s clear that your need for life insurance changes along with your life. That’s why a flexible policy may be the one for you. Universal life insurance allows you to raise or lower your coverage, and your premiums, along with your needs. It even helps you potentially build account value that you can use during your lifetime.
How Universal Life policy works
A Universal Life policy includes something called “account value.” This is basically a cash account that you can access for your own needs. Your premiums (minus expenses) are deposited in your account, which grows based on the current interest rate. The premium amounts and coverage are flexible. You can raise or lower your coverage depending on how much coverage you need. Various deductions are made from your account, as you can also take loans or make withdrawals for your needs. Loans and withdrawals will reduce the death benefit and cash value. The policy will not default as long as the value of the account has sufficient funds to cover the monthly deductions.
This type of life insurance policy is generally for the budget savvy. Contact us for more information. One of our life insurance agents can help you decide if this is the right policy for you!