You will see cash value growth as long as you continue paying your premiums for your universal insurance policy. Depending on the policy you select, you might need to pay an upfront premium or a fixed monthly fee.
The policy goes into effect the day after it is issued. UL may provide an income tax-free and death benefit to your family to help you protect their financial well-being. As long as you maintain a positive cash balance, your coverage is not canceled.
There are many different types universal life insurance policies. Make sure you understand the details. They come with different features and cost.
UL allows you adjust your payments to fit your needs. You may have to pay higher premiums in the end to keep your coverage. However, that flexibility can make your life easier if your earnings fluctuate.
Guaranteed universal insurance has the lowest risk. Variable Universal Life has greater chance, as the cash value of the cash is tied to bonds or stocks. On the other hand, guaranteed universality can be more risky than guaranteed universality. You can also build more cash value through indexed universality and variable universality.
Policiesholders have greater flexibility than other types of permanent insurance policies. For example, you can reduce your premium payments or alter your death benefit amount. You can also earn more interest with the cash value component, although it is possible for the value to decrease over time.
If your policy remains active after your death, your beneficiaries only get the death benefits. The insurance company keeps any excess funds. Beneficiaries receive either one tax-free payment or monthly and/or annual installments. Annuities are an option for some insurers. This is where the insurer agrees with the beneficiary to pay a onetime fee or periodic payments over a set period.