Do You Need Universal Life Insurance?
Universal life insurance is a lesser known type of life insurance. The policy never expires no matter at what age you pass away. And it gives you the ability to earn cash value. You also have the option to change the payout and the rates to better fit your circumstances. And in the end, your beneficiaries still receive the benefits upon your death. This is one of the few life insurance policies that also benefit you while you are still living.
The insurance company splits the premiums between the actual cost of insurance and the saving component which is the cash value. You must pay the premiums, but anything paid over the minimum amount due goes to the cash value. This money is tax-deferred, meaning that it accumulates fairly quickly. You can use the accumulated cash value to cover the premiums if you wish, leave it alone or use it for something else.
You can borrow money from the policy without any tax implications or effect on the benefit. You will pay interest, but the rate is usually lower than from a bank. Keep in mind that failure to repay the loan may reduce the amount given to your beneficiaries.
Universal life insurance is a good option if you want long term coverage and the ability to invest money. Compare it to other forms of life insurance to see which is best for you.