Universal life insurance is a new concept compared to the other terms that you hear like the whole life, life insurance or term insurance. It’s only been 25 years that universal life policies has been introduced in the market. Other terms that are mentioned above are 100 years old. Universal insurance was made to meet the changing needs of the consumers.
If you see different terms of life insurance was developed as per the need aroused and there was a huge demand for it. Term insurance is a unique one and it was developed to protect individuals for a definite period of time. With term insurance you need to pay low premiums compared to other insurance.
Generally life insurance covers until age 100. But there are reserves established by insurance companies to offset the increasing costs of insurance protection as people age. And thus cash values developed. These were paid to the beneficiaries as part of the death benefit.
If you look why Universal Life was developed, it would show you very distantly what the ‘reserve’ or investment portion of an insurance policy was, and also the cost of the annual insurance. Universal life insurance allows you to decide the amount of premium that you want to pay, that falls within a range of allowed minimums and maximums.
Here the premiums that are paid above the actual cost of the insurance go into an investment fund that belongs to the policy holder rather than the insurance company. It also allows you to pay additional funds into an investment account and actually prepay their insurances. Moreover you can also adjust the amount of insurance which is required at different points in their lives, and can only pay for the coverage they need.
Universal life policies is the only life insurance that has flexible plans.
Before you buy an insurance product consult with a Life Insurance Expert so you can get information from and then and decide which one would be the best for you as per your goals, needs, and budget.