Universal life insurance is a type of permanent life insurance that combines a death benefit with a unique feature: a cash value account that grows over time. This cash component can be invested in various options like stocks and bonds, and it grows with a tax-deferred interest rate, which means you don’t pay taxes on the interest as it accumulates.
In contrast to term life insurance, which only covers you for a specific period, universal life insurance offers ongoing protection for your entire life, provided you keep up with the premium payments. This continuous coverage gives you the reassurance that your family will have financial support in place, even long after you’re gone.
A standout aspect of universal life insurance is its adaptability. You have the flexibility to adjust your premium payments and the amount of your death benefit to match your changing needs and financial situation over time. This flexibility makes it possible to shape the policy to fit comfortably within your budget and align with your long-term financial objectives.
Another significant advantage is the accessibility of the cash value. You can borrow against it or make withdrawals, giving you a tax-advantaged financial resource for various needs, such as handling unexpected bills or boosting your retirement funds.
Overall, universal life insurance is a versatile and adaptable choice for those seeking lifelong coverage with the added benefit of a growing cash value. It’s a key part of a well-rounded financial plan, offering several valuable benefits for you and your loved ones.