For those who prioritize flexibility in their financial security, having the ability to adapt their life insurance coverage as their needs change is crucial. If you resonate with this belief, Universal Life insurance might be the ideal choice for you.
What is Universal Life insurance?
Universal Life insurance provides a unique combination of benefits, including flexible premiums, access to cash value, and the option for lifelong coverage. If having control over your premiums and benefit amounts is important to you, Universal Life insurance offers the flexibility you need.
How can flexible premiums help with the unexpected?
Just like any life insurance policy, Universal Life policyholders have to pay premiums. From each premium payment, a certain percentage is collected by the insurer to cover expenses and the cost of insurance. The remaining amount is then added to the policy’s account value, which grows tax-deferred at a competitive rate of interest.
This is where the flexibility of Universal Life insurance truly shines. Apart from paying the required premium, you have the option to contribute more to the policy. The surplus amount, after deducting the premium expense charge, will be added to the account value and accrue interest. Conversely, if you find yourself needing to skip a payment or two, your policy won’t lapse as long as there is sufficient account value to cover the expenses, subject to policy conditions and minimums. This flexibility allows you to respond to financial opportunities or disruptions without having to make significant changes to your life insurance policy.
Flexible death benefits that adapt to your needs
Another advantage of Universal Life is the ability to adjust the amount of coverage within certain guidelines. This can be done in two ways:
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Increasing your life insurance coverage: Over time, your permanent life insurance needs may change, such as when you purchase a larger home or have another child. With Universal Life insurance, you can increase your coverage without the need to purchase a new policy. Typically, additional premiums would be necessary to maintain the policy and continue lifelong coverage. It’s important to note that any increases in coverage must be applied for and are subject to underwriting.
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Decreasing your life insurance coverage: If your financial responsibilities change, Universal Life insurance allows you to decrease your coverage without the need for a new policy. You have the flexibility to determine the amount of decrease, as long as it falls within the policy guidelines.
The flexibility of Universal Life insurance
Universal Life insurance not only offers lifelong benefits and a guaranteed interest rate on the accumulated cash value, but also the flexibility to adjust premiums and death benefits according to your changing needs.
If you’d like more information about whether Universal Life insurance is the right choice for you, we recommend discussing your needs with a State Farm® agent. Remember, there are other options available as well, such as Term Life Insurance, Return of Premium Term Life Insurance, or Whole Life Insurance.
FAQs
Q: Can I change the amount of coverage with my Universal Life insurance policy?
A: Yes, Universal Life insurance allows you to adjust the amount of coverage within certain guidelines. You can increase or decrease your coverage based on your changing needs.
Q: What happens if I need to skip a premium payment?
A: If there is sufficient account value in your Universal Life policy to cover expenses, you can skip a payment or two without causing your policy to lapse. However, it’s important to consider the policy conditions and minimum requirements.
Q: Can I increase my Universal Life insurance coverage without purchasing a new policy?
A: Yes, you can increase your coverage without the need to purchase a new policy. Additional premiums would be necessary to maintain the policy and continue lifelong coverage.
Conclusion
Universal Life insurance provides the flexibility and peace of mind that comes with adaptable premiums and customizable death benefits. By offering the option to adjust coverage as your needs change, Universal Life insurance ensures that you maintain the financial security you require. To explore if Universal Life insurance is the right fit for you, consult a State Farm® agent or discover other options like Term Life Insurance, Return of Premium Term Life Insurance, or Whole Life Insurance.
