Universal Life

What is Universal Life Insurance?

Universal life insurance is one of the two main types of permanent life insurance (the other is whole life insurance). Like whole life, a universal policy can provide lifetime protection while building cash value with tax advantages. Universal lifealso gives you the flexibility to raise or lower premiums within certain limits, so it can cost less than whole coverage. But it also offers fewer guarantees than whole life because if you make minimal premium payments for too long, it can impact cash value growth and the size of your death benefit.

Why people choose Universal Life Insurance:

Lifetime protection

From the first day the policy is in effect, UL can provide an income tax-free death benefit to help protect your family’s financial wellbeing.4 And as long as you keep a positive cash value amount, your coverage can’t be canceled.

Cash value

Like all permanent life insurance, it has a built-in cash value that grows over time and earns interest.5 You can take out policy loans against the cash value, use it to pay your premiums, or even use your coverage for cash to supplement your income in retirement.

Flexible premiums

UL lets you raise or lower your payments within certain limits as your circumstances change. While you may eventually have to pay higher premiums to keep your coverage, that flexibility can make it easier to keep your insurance policy in force if your earnings vary.

Tax advantages

The policy’s cash value grows on a tax-deferred basis, so no taxes are owed on current earnings or interest. Also, the death benefit is paid income-tax-free to beneficiaries.

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