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Universal Life Insurance

Universal Life Insurance

Universal life insurance is one of the types of life insurances that people misunderstand, we are here and will explain to you how different both policies are!

Universal life insurance is sometimes known as cash value life insurance. It lasts your entire life.

Here’s How Universal Life Insurance Works

Universal life insurance is split into two parts -- one is life insurance, and the other is savings and investment.

It is flexible because it allows you to choose the amount of the premium, which includes the death benefit and administrative fees.

The premium paid is added to the cash value, and the insurance company guarantees that minimum annual interest rates, set by the company, will grow.

Types of Universal Life Insurance

The most effective and least expensive permanent insurance is universal life. Similar to whole life, its premiums are fixed, and the death benefit is guaranteed while being tied to the financial markets. There are three types of universal life insurance policies:

  • Guaranteed Universal Life Insurance
  • Variable Universal Life Insurance
  • Indexed Universal Life Insurance

Each type has its own characteristics but is less expensive than whole life no matter which you choose. Guaranteed universal life is sometimes referred to as permanent term since it will last the rest of your life but will not accumulate cash value. Variable universal life is tied to market fluctuations and can reap large benefits or losses. Indexed universal life never loses its cash value and takes some advantage of market forces. Universal life is the most complex insurance instrument Best Life Insurance Advisors offers.