What is Universal Life Insurance

Reader’s Question:

I just want to ask what is a universal life insurance?

Arthur

Honolulu, HI

I can give you some overview answers, Arthur.

There are many different types of universal life insurance plans available in Hawaii. You see, most people are familiar with term life insurance that pays the policy amount of your death. Term insurance policies often have a premium guaranteed not to increase for a fixed number of years. Whole life policies are designed as permanent plans that you could own for lifetime. These policies build cash rate besides the death benefit. The cash rate can be borrowed against, and sometimes withdrawn. A disadvantage of a universal life insurance is that the customer’s insurance needs could change over time and the terms might not be very useful in the future. The policy may not fit your current needs. Flexible universal life insurance policies vary by company. Typically they allow you to adjust the amount of term coverage up or down within limits. After the first year you can also change the amount of payment in your universal life insurance. If the time comes when the policy is no longer wanted there is usually an option that you can surrender the policy and get the cash value that has built up in your universal life insurance. Everyone’s needs are different so I suggest you sit down with a good agent to review possible options.

Maybe you need to understand the terms of the policy you choose. And remember that universal life insurance often can extend for many years so it is important to purchase from a very stable company.