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Universal Life

What It Is

Life insurance is monetary protection to cover those who depend on the insured person’s paycheck. If the death occurs prematurely, this insurance will provide a considerable amount of funds to cover funeral expenses, and for living expenses going forward now that the family breadwinner is no longer available.

Who It’s For

This insurance type is for anyone who provides the vast majority of the household income and has a family of two people or larger. Those who are single or provide less than 50 percent of their total household income don’t necessarily need to purchase this insurance. Calculate how much a funeral would cost and look at the total expenses of the household for a period of three to four months. If those in the household wouldn’t be able to cover all or most of these associated costs, it may be beneficial to purchase some insurance.

How It Works

There are three types of life insurance: Term Life, Whole Life and Universal Life. For each type, the insured person pays a monthly premium to receive the insurance. With term life, the insured person purchases coverage that lasts for 10, 20 or 30 years. If the person dies within this time period, the family will receive the amount specified. With Whole life, there is no set time limit for coverage. This insurance provides a cash account that builds over time. Universal life is permanent insurance that takes the premiums paid for the insurance and applies it to the cash value of the policy.

Major Benefits

The primary benefit of this insurance is that it provides for a person’s family even when they are gone. Typically, it covers everything from funeral and medical expenses, to ongoing income to replace the income of the insured person. No matter the policy chosen, the money received is tax free.






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