Universal Life Insurance is Permanent
With life insurance, you will be protecting your family should you die, because your life insurance policy will give them a sum of cash in order to get by without you. While it’s never very much fun to contemplate your guaranteed mortality, it’s even more unpleasant to imagine your loved ones without your income to support them. But which type of policy to get? One kind of life insurance that many people take advantage of is universal life insurance. Universal life insurance takes your monthly premium and pays interest on it.
How Universal Life Insurance Works
Universal life insurance is a kind of permanent or whole life insurance. That distinguishes it from term life insurance. With universal life insurance, you keep paying into it until you die, and the people you list as beneficiaries get the benefit. With term life insurance, you only insure yourself for a finite number of years, and you don’t get any of that money back. Term life insurance is like car insurance, in that it is risk-only. Once you’re done with car insurance, you walk away and the auto insurer owes you nothing.
Withdrawing from Your Policy
With universal life insurance, you can use the money accrued under your policy before you die. Whatever you withdraw subtracts from the total death benefit received by your heirs. Universal life insurance costs about as much as other kinds of permanent life insurance, which is always much more expensive than term life insurance.
To learn more about universal life insurance, be sure to consult with a life insurance expert.