Universal Life Insurance Explained
Universal life insurance is flexible permanent life insurance.
As your needs change your insurance can also change to fit your needs.
Sometimes people confuse the more complex variable universal life insurance with the basic universal life policy.
Here is a description of the original basic type of policy.
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- Universal Life
Universal life is like a savings account from which money is withdrawn each month to take care of insurance charges and administration costs.
You deposit varying amounts at whatever intervals you see fit as long as the balance in the account is sufficient to pay the monthly insurance premium and administrative costs.
Some of these policies have a guaranteed interest rate and a ” no lapse ” policy feature which work very well as long as the premium requirements are met.
- Variable Universal Life
Variable universal life is permanent life insurance that allows you the opportunity to decide where your money will be invested. There is a vast portfolio of options. Your money may be invested in stocks, bonds, money market funds and mutual funds.
When you own a variable universal life policy you own life insurance protection as well as account value accumulation. The wide investment options allows you to allocate premium payments between a great selection of variable accounts.
Sales of these products must be preceded or accompanied by a current prospectus for the particular products and their investment choices, which contain detailed information on charges, expenses, risks, and investment objectives.
Before You invest money in a variable universal life insurance policy it is imperative that you carefully read the prospectus.