One exception is if you were to borrow against your cash value. The loan amount isn't taxable if you pay back the total amount while your policy is still active. Your policy might lapse if the amount you borrow (including interest) exceeds the cash value.
Variable universal life insurance (VUL) lets policyholders choose how to invest the cash value portion of their policy. Options include stocks, bonds, and mutual funds – you can also choose to invest in multiple accounts.
Variable universal insurance (VUL), allows policyholders to decide how to invest the cash portion of their policy. There are many options available, including stocks, bonds and mutual funds. You can also choose to invest across multiple accounts.
Indexed universal lifestyle insurance (IUL), however, will allow you to earn interest tied directly to the performance of index funds like S&P 500. Your insurer may restrict your rate of return. You might also have the option to receive all or part from your cash value through a fixed-rate bank account.
Fixed universal life typically has the lowest risk. Variable universal is more likely because it has a cash value that is tied to stocks or bonds. However, guaranteed universal life has the lowest risk while variable universal life and index universal life have more potential to build cash value.
A whole-life policy guarantees that the premiums, cash value, and death benefit will not change. All of these things can be altered with UL. Cash value growth is affected by the premiums you pay. The cash value you spend will impact the amount your loved ones receive after you pass. This could lead to the policy being canceled. It would help if you kept in touch with your financial professional to ensure that your policy meets your needs.
Your universal life insurance policy will grow in cash value as you continue to pay your premiums. Depending on your insurer and policy, you may be required to pay one upfront premium payment. Or a fixed monthly Premium.