Universal Life Insurance is a flexible-premium, adjustable benefit life insurance policy where premium payments above the insurance cost are credited to the account. The interest credited to the account is determined by the insurer; and often is tied to a financial index such as the S&P 500, Russell 2000, the Dow, Nasdaq, and other indices. The policy's flexibility allows you to adjust the insurance amount as your needs for insurance change over the years. Some changes may require underwriters approval.
As with all life insurance, the main purpose for purchasing a Universal Life insurance policy is the death protection provided to your loved ones upon your death.
Universal Life Benefits
Flexibility -- You choose the amount of life insurance -- and subject to certain guidelines, limitations, and requirements, you are able to adjust the death benefit and premium payments to suit your needs.
Financial Security -- You help protect your loved ones against possible financial hardship in the event of the insured's death.
Tax-Deferred account -- Your Universal Life policy's account earns interest and it is tax deferred income. Most current interest rates are guaranteed to be at least 4% a year.
Tax Free death benefit -- Current tax laws governing individual life insurance, life insurance proceeds are generally tax free income to the beneficiary.