Universal Life Insurance

Universal policies are sold as investments that combine insurance protection with savings. Actually, a Universal Life Policy can be defined as a flexible premium deposit fund that is combined with monthly renewable term insurance.

Universal term insurance works in the following manner:

An initial specific premium is paid. Then expenses are deducted from the gross premium and the balance is credited to the policy’s initial cash value. Secondly , a monthly mortality charge is conducted from the cash value to pay for the pure insurance protection. And finally, the remaining cash value is then credited with interest at a specified rate.

The basic characteristics of universal life are as follows:

• There are two forms available

• Protection, savings, and expense components are separated.

• There is a stated investment return.

• Considerable flexibility

• Cash withdrawals are permitted.