Universal Life Insurance Benefits

Universal Life Insurance is a type of permanent life insurance. It provides you a life long protection with continuous premium payment. This is an innovative product which developed from the combination features of unit linked insurance plan (or investment linked insurance in some countries) and whole life insurance.

Universal Life Insurance has the cash value buildup, which comprises a small portion of guaranteed return and the other portion of investment return which is not guaranteed. Not the entire premium paid will be used to pay the insurance charges. The insurance charges are deducted from the cash value and the residue amount (after deducting some fees incurred) will be invested by the insurance company.

Universal  Life Insurance Benefits

Universal Life Insurance provide flexible protection. You may at any time change the coverage amount (subject to underwriting) according to your needs. If the number of your dependants increase and you feel there is a need to increase your coverage, you can do so without having to purchase another policy.

On top of that, it also offers flexible premium. The premium can be adjusted any time if you feel there is a need to do so. At any one point, if you want to increase your premium or make a single premium top-up, it is allowable.

Part of the premium for the policy will be invested. Hence, there is a potential higher return compare to whole life policy in the long run. It gives you both world of getting protection and maximizing your return. However, this portion is totally non-guaranteed. Low return is possible.

Unlike whole life policies, Universal Life Insurance allows converting of cash value into paying the premium (or more accurately the insurance charges) in case you do not pay your premium on time or within the grace period. This helps people facing short term financial crisis to enjoy the relief and pay back when the crisis is over.

The guaranteed return portion of this policy helps stabilizing the cash value. As markets are volatile, you may not get the return as projected earlier. If there is a loss, the guaranteed part may help to reduce the impact of it.

The death benefits are tax free. Hence, your beneficiary will get 100% of the amount of coverage.

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