A flexible, permanent type of policy in which your insurer deposits your premium payments into an interest-bearing account, and it continues to grow. You may borrow against these funds if necessary, cash them in, invest them, or use their accumulated value to cover a payment if you ever need to.
As with any other type, universal life insurance has its advantages and disadvantages. Advantages include:
• Flexible premiums
• Adjustable benefits
• Cash value that builds
• Stable investment options
• Full disclosure of insurer expenses and charges
Disadvantages include:
• Premium rates that aren’t guaranteed
• Risk of lapse when cash value falls low
• Potential for growth that’s dependent on interest rates
• Responsibility for maintenance of death benefits