Universal Life Insurance
Universal life insurance combines an annual renewable term policy with a side fund that accrues interest【415146479434174†L212-L224】. Part of your premium pays for the term insurance, while the remainder is deposited into the side fund. The interest credited to this account offsets the increasing cost of the term portion over time.
The flexibility of universal life allows you to adjust premium payments and death benefit within certain limits. However, the side fund’s performance depends on current interest rates; if rates remain low or if you underfund the policy, the cash value may decline and the policy could lapse【415146479434174†L212-L224】.
Universal life policies vary widely across insurers, so it’s important to understand the guarantees, fees and interest crediting method of a specific product. Quotes are estimates based on limited information; final premiums and policy performance are determined by the insurer after underwriting.