Universal Life

Another type of “permanent insurance”, often referred to as “adjustable life insurance”, Universal Life offers potential cash value growth while offering premium flexibility. The excess of premium payments above the cost of insurance is credited to the cash value of the policy, which is credited with interest. Interest is usually tied to the company’s portfolio or a market index. Premiums and death benefit may be adjustable over the life of the policy. As with Whole Life insurance, the cash value can be accessed by the policy owner to be used as they see fit. If the policy’s premiums are not guaranteed, the cost of insurance may increase as the insured ages. It is therefore important to at least pay the cost of insurance or the policy could lapse. A Guaranteed Universal Life policy (GUL) offers a death benefit and premium payments that will not change over time.