Variable universal live insurance (VUL), which allows policyholders control how the policy's cash-value portion is invested, lets them choose. Stocks, bonds, and mutual fund options are available. You can also choose multiple accounts to invest.
The policy becomes effective on the first day. UL can provide a death benefit that is income-tax-free to help your family's financial security. As long as your cash value is positive, your coverage cannot be cancelled.
Universal life insurance is a type permanent insurance. Unlike term insurance that is only good for a certain period of time, like 20 years, universal insurance can be used for the rest your life (unless premium payments are stopped).
With more options than term or even whole life coverage, a UL policy can be complex. The policy needs to be managed: you must determine how much you want to pay for premiums, and with variable UL, you also have to make investment choices. Those variables, along with insurance costs that increase over time, can affect and even detract from your cash value. So you also have to keep an eye on your value balance over time: If it goes down to zero, your premiums could go up, or the policy may lapse.
Universal life insurance, a type of permanent insurance, is a form of universal life insurance. Unlike term-life insurance, which only lasts for a specified period (e.g. 20 years), universal life insurance lasts for the rest of your lifetime (unless you stop making premium payment).
There are a few types of universal life insurance policies, and it's crucial to understand what you're buying. Their costs and features are quite different.
Universal life insurance is one of the main types of permanent, whole life insurance. Universal policies can offer lifetime protection, cash value and tax advantages. UL allows you raise or lower your premiums within a certain limit so that it costs less than full coverage. However, UL offers less protection than whole life. You can't make too many premium payments and it can affect your cash value growth or the size of your death benefits.