Universal Life Insurance by Platinum

Universal life insurance is similar to whole life insurance in some ways, but very different in other ways. Universal life insurance is permanent and based on a cash value, like whole life insurance. It doesn’t matter if the policy holder lives to the age of 90; their children, spouse or other beneficiaries will still receive total financial security. And if the policy holder cancels their insurance at any time, they are entitled to the accrued cash value. There are some crucial differences, however, between these two types of insurance.

One crucial difference between universal life insurance and whole life insurance is the fact that policy holders can set the difference between the death benefit and the cash value accumulation. The death benefit can be increased and decreased without switching to a different policy, which would be required with whole life insurance. Any premium payments above the cost of the insurance are credited to the accrued cash value. The cash value is credited each month with interest, and the cost-of-insurance charge is drawn from the cash value if no premium payment is made that month. The interest credited to the account is determined by the insurer. There is also a range of premium payments that can be made to the policy, from a minimum amount to cover various guarantees to the maximum amount allowed by Internal Revenue Service rules.

When you have a universal life insurance policy you can decide how much of your premium payments will go towards each section, and it also provides more freedom to make changes in your policy. Universal life insurance policy holders can increase and decrease the amounts of the death benefit or cash value account. Some people even use universal life insurance as a savings account that they withdrawal money from whenever they want. If the policy holder doesn’t replace the money taken from the cash value account, though, the amount of money left in the death benefit will decrease.

Universal life insurance is a popular option for those who want freedom of choice and liquid capital, which allows each policy holder to decide how much coverage they want at any given time.