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Universal Life Insurance

The Importance of Universal Life Insurance

Universal life is a specialized kind of life insurance that is designed for working adults. It is not uncommon for employers to partially contribute to these policies as a workplace benefit for employees. This kind of coverage is distinguished by the fact that it can earn interest on accumulated funds, which are also available for withdrawal in times of need.

Who Needs It

Good universal life insurance is arguably most beneficial for adults with spouses, and certainly those with children. It can pay out notable financial benefits to one’s family, especially in challenging times. Upon achieving retirement age, those who carry this insurance will commonly adjust their policies as a result of their changed employment status. Keep in mind that generally a universal life policy is considered an investment vehicle that appeals to those still of working age, rather than the elderly.

How it Operates

A policyholder is obliged to pay a premium determined when the account is initially created. Funds from the policy can become available over time for withdrawal should there be a need for personal usage. Eventually, the premium amount and the deductions will be modified by how the money is used over time for savings and, if chosen, for spending. The life insurance savings can also qualify for tax breaks in some case and the death benefits (when paid out to the beneficiary) will also not be taxed as income.

Different Kinds of Coverage

With universal life insurance, a death benefit is made available upon a policyholder’s death. Spouses and family members of the policyholder can be equal, or otherwise, in the distribution of benefits depending, on policyholder preference. This insurance has the added distinction of providing to policyholders for use such as higher education tuition costs, payment of debt, etc. It is quite flexible.

Big Benefits

Universal life insurance can help immensely in a family’s time of hardship. The insurance can be utilized to pay for medical expenses or for other unexpected expenses, such as hiring a legal team, or the need to travel long distances for personal matters. This form of life insurance can even help pay for college, mortgages and much more.