What is Universal Life Insurance?

Universal life insurance has become relatively popular in a short span of time. It offers a unique combination of both, whole life and term life insurance, put together into a single package.

It makes sense to find the underlying difference between term life and whole life coverage first. You would be in a better position to identify the right type of plans for yourself.

Term life is purchased with a fixed price, for a fixed amount of time and your premiums and benefits will not change. If insurance is needed for only a limited amount of time, this is the type of coverage that is best chosen, and it is also the least pricey option. For example, term life is offered by most employers in benefit packages available to employees.

Whole life coverage has many more premium payment options than term life, but has a greater price associated with it. Even though it costs more, whole life includes an investment option that is not available with term life coverage. Thanks to this investment option, your premiums will be tax exempt; they are considered an investment.

Whole life also has another advantage; you can borrow against the cash value of your policy. In this case, you do have to pay taxes, but should any unexpected expenses pop up, you will now have emergency funds at your disposal.

Universal Life insurance: The best of both worlds

There’s a bright side. Universal insurance integrates the two together to make a wonderful, carefree plan. You would have fixed amount of premium to be paid. Universal life coverage also provides whole life insurance policy’s investment option, so money isn’t thrown away. It is economical in nature as compared to both term life and whole life insurance.

The cash value of your policy will continually change with current and future market values, which means there is a small possibility that your policy will decrease in value over a short period of time.

Do not be alarmed; market values increase and continue to make money over long periods of time. Due to this, the younger in age you are, the more your policy will do for you, over the years.

A fee is required if you decide to borrow against your policy, an option that is very much available with universal life coverage. Therefore, it is best to check with the terms of your policy before you make any borrows.

If you neglect to borrow cash from your policy and let that money build up, you could use that sum to help lower your premiums. Unfortunately though, if your policy is losing money your premiums will increase to replace loss that might occur. It has some risk involved, but with the investment option, you will be safe.

Knowledge is Power: Know your options!

One must always research different options available before buying something as important as insurance. It is beneficial to do your reading and explore what you can, if you are going to make the most informed discussion. Though tedious, it will be rewarding to know that you chose the best policy out there for you.

There are many different venues to explore to find the information you are looking for. Take for example the internet; it is a good place to start, but there are many scams on the World Wide Web, so it should only be a starting point for your research. After some research, it would be best to contact an agent who could help you and give you guidance.


You always want to make sure that you are buying policy from a certified, highly regarded provider. A qualified agent can point you in the right direction, like universal life insurance, that can make you feel safer and more secure during your journey.