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Universal Life Insurance


One of the many great attributes of a Universal Life Insurance policy is its flexibility. These polices can be illustrated in many different ways in order to meet any goal. They are different from Whole Life Insurance in the sense that premiums can be reduced or increased at any time whereas with a whole life policy the premium is fixed for life and must be paid to keep the policy from lapsing no matter what the cash value of the policy may be. With Universal Life Insurance as the cash value grows in some cases so will your death benefit or “Face Amount”. When this happens you as the owner of the policy have the option to pay less premium or simply pay nothing as the policy will automatically eat the cash value as premium to keep the policy in force.

A Universal Life Insurance policy can also be designed to earn very little or no cash value and in return carry a much less expensive premium yet still last until age 125 without lapsing. This is very commonly done as to keep costs of insurance down. Another advantage to Universal Life Insurance is that it can also be designed to be paid up at any desired age. For example an applicant may decide to have their life insurance paid up by age 65 knowing that at 65 they will be on a fixed income. This is great because after age 65 they will no longer have a premium to pay. Of course with this example the premium will inflate as the number of years of premium payment reduce.

Many people want to know what the difference between Term Life Insurance and Universal Life Insurance is. Well that is very simple to understand. Term Life is exactly what it sounds like. It is Life Insurance designed to last only for a set period of time. The term however is up to you. Popular term increments are 10 years, 15 years, 20 years, 25 years, and 30 years. However usually after the age of 55 the 30 year term life insurance is no longer available to a Life Insurance applicant. Universal Life is designed not only to be flexible but also to last for the life of the insured. This gives the insured peace of mind knowing that their insurance is never put in a position to lapse.

Of course many times people go after Universal Life Insurance policies for the cash value benefit. When it comes to cash value, no other Universal Life product performs as well as the Indexed life insurance universal products. Generally speaking the hypothetical earned interest rate that is statistically proven is at about 9.62% which is higher than almost any other form of financial investment available now. In the past 10 years these products have become increasingly popular especially with the younger and financially savvy youth of today. This is for two reasons. First is because younger individuals have time on their side and second is because this product needs about a thirty year block to reach its potential earnings.

All in all we hope you found this information about Universal Life Insurance useful and that you take full advantage of this life insurance quote center to see what type of life insurance policy can be designed to best fit your needs and goals.

Life Insurance Universal

Questions and Answers

  • Q1: Do all Universal Life Insurance policies earn cash value?
    A: No, it all depends on how your policy is illustrated.
  • Q2: Do you Universal Life Insurance policies last forever?
    A: They are can be designed to last until age 125 but they can also be designed to last for only 10 years.
  • Q3: Are Universal Life Insurance policies more expensive than Whole Life policies?
    A: Generally speaking no they are not, however if the applicants goal is to earn as much cash value as possible it may turn out more expensive than a comparable Whole Life Insurance policy.