Universal Life

Universal Life insurance is a hybrid insurance that sometimes acts similar to Term Life insurance and sometimes like Whole Life insurance.  It can have lots of bells and whistles, and comes in many forms and names.  Universal Life insurance however was originally conceived to allow the insured “flexibility” with any aspect of the insurance contract.  For example, the death benefit can be reduced or increased, the premiums can be reduced or increased or even stopped.  Because the insured allows the policy to be flexible, there are more fees associated.  Some Universal Life insurance plans allow very large premium payments and some even invest the separate account (the cash value)using a relatively new concept called indexing.  Some Universal Life insurance plans pay interest or dividends based upon an Index such as the S&P 500.  Because of the complexity of these plans, many government regulations have been imposed upon insurance carriers and their agents who promote these types of plans.

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