What Is Universal Life Insurance?
What Is Universal Life Insurance?
Another common type of life insurance is universal life insurance. This is a type of permanent insurance, which means that the policy coverage will last your entire lifetime if you continue to play the monthly premiums. What makes universal life insurance so popular is the fact that the policy also holds a cash value component, which is separate from the death benefit that your family will get once you die.
The way it works is that each time you make a payment that goes toward the premium, a small portion of the funds will go toward the cost of insurance (what will get paid out with the death benefit) and the rest will now be part of the cash value that will increase at an annual interest rate. The extra funds can then be used in a variety of ways, including a savings for retirement.
Because there are so many different types of life insurance policies, people tend to get confused as to which one is best. Let Inter-Action LLC be your life insurance policy guide, helping you find exceptional and affordable coverage.
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Frequently Asked Questions
A universal life insurance policy is a type of permanent life insurance that offers both a death benefit and a cash value component. It provides flexibility in adjusting premiums and death benefit amounts as financial needs change over time.
Guaranteed universal life insurance (GUL) is a type of universal life insurance that focuses on providing a guaranteed death benefit rather than accumulating cash value. GUL policies offer fixed premiums and lifelong coverage with a guaranteed payout to beneficiaries.
Term life insurance is a type of life insurance that provides coverage for a specific period, typically ranging from 10 to 30 years. It offers a death benefit to beneficiaries if the insured person passes away during the term of the policy.
Universal life insurance offers lifelong coverage, flexibility in premium payments and death benefit amounts, and the potential for cash value growth. It provides a combination of protection and potential financial growth, making it a popular choice for individuals and families.
Indexed universal life insurance (IUL) is a variation of universal life insurance that links the cash value growth to the performance of a stock market index, such as the S&P 500. It offers the potential for higher returns while still providing a death benefit and flexibility in premium payments.
