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Universal Life Insurance Universal Life Insurance is the best of both Whole Life and Term Life Insurance. Universal Life provides the protection of Term Life and the reassurance of Whole Life. Universal Life Insurance is a life insurance policy that will accumulate cash value. Many people look at Universal Life Insurance as a savings account. An individual has the option of borrowing money against their policy. You also have the option of surrendering a Universal Life Insurance policy. This means you would be given the cash value of your policy returned to you. How does Universal Life Insurance Work? The company who sold the universal life insurance will take a small expense charge out of your premium payments. This expense charge is generally 5 percent or less. The remainder of the payment is added to your account value. Your account value will earn interest each month. The amount of interest you will earn is dependent upon the interest rate. A benefit of universal life insurance is that individuals are free to pay into the account as much as they want. If they happen to miss a monthly premium, the premium is deducted from the account value. This means a policy will not lapse. Withdrawing Money from Your Universal Life Insurance You have the option of taking withdrawals from your insurance policy's value. However, many insurance providers will limit the amount of withdrawals a policy holder may take each year. Many insurance companies also require that the withdrawal you take from your account to be no less than a certain amount. This is usually $500.00 to $1000.00. Universal Life Insurance gives you an option of changing how much life insurance you have as your needs change. This option is wonderful for someone who may be self-employed who has a change of income from year to year. If you lower the amount of life insurance, your premiums will decrease. If you change your insurance policy to a larger amount, the amount of your premiums will increase. When shopping around for Universal Life Insurance, be sure to read each policy you are offered very thoroughly. Be certain you understand what the policy is offering to you and be sure to ask questions.
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