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What is the Advantage of Universal Life Insurance?

What is the Advantage of Universal Life Insurance?

There is more than one advantage to universal life insurance. As a matter of fact, there is a wide range of advantages and people of all ages are benefiting. They are finding that this form of permanent life insurance has everything that a person needs from the fact that premium never increases and the death benefit never changes to the cash value that is obtained.

Although like whole life insurance in a lot of ways, there are some things that are much different. The premium may be a little higher, but it does offer some flexibility that is not going to be offered in any other way. Some don't get universal life insurance as their coverage, though, because they are confused by it.


There are a number of ways in which the policyholder benefits and, in the end, the beneficiaries benefit from the death benefit and the cash value that is paid to them in the end. You benefit from such things as flexible premiums.

After you make your initial premium payment, you can then make flexible payments at any time and in any amount as long as you adhere to the minimums and the maximums of the month or period that you are making payments toward. You may encounter the possibility of a no lapse guarantee if something would happen that you missed payments, but know that these guarantees heighten the restrictions on the policy.

The no lapse guarantee is something you can opt for that allows your cash value to pay your premium if you miss a payment. If you don't have enough cash value, the policy will lapse. If you do have enough, then your payments can be made until it is gone. However, you want to keep your cash value up the best you can so that you can borrow from it if you ever need to.

The interest rate in which the cash value is gained is a periodic rate. The insurance company will generally guarantee that the interest will not drop below a certain level. This is because it does fluctuate with market value. Sometimes you'll gain higher interest, while other times you gain lower interest. This can be rather beneficial, though, especially when the rate is up.


As for the advantages, there are those that are specific to an individual. The initial premium may be lower than a whole life insurance policy. From there you pay within your minimums and maximums in any amount that you want.

The second advantage is that you have a choice as to what you want your premiums to be as long as you remain within the minimum and maximum limits. So if your minimum is $45 and your maximum is $150, you can pay anywhere in between. A portion of that premium is then invested in investments that are chosen by the insurance company. The more you pay, the more that is invested. This shows that there is a lot of flexibility in how the universal life insurance policy can earn.

Basically, you are able to increase the cash value of the policy by how much you pay into it, which dictates how much is invested in it. You can make the policy grow at your will and borrow from the cash value when you need to. It's like having your own personal bank that you can borrow money from. That is why there are so many individuals opting for permanent life insurance every single day due to the many advantages of universal life insurance. They see how they can be benefitted now and how their beneficiaries can be benefitted later.

ING Transamerica Insurance and Investment Group American General Life Companies Prudential Genworth Financial Services SBLI Life Insurance Company

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