Best Universal Life Insurance Companies of 2023
If you wish to safeguard loved ones who will be financially dependent on you after your passing, you must purchase a life insurance policy. Additionally, certain insurance plans, like universal life insurance, include a savings component that serves as an additional investment vehicle for your entire financial plan.
We’ve done the research and compiled a list of the top-rated universal life insurance providers based on criteria including financial stability, customer support, and policy offers to help you pick which policy best suits your needs.
Universal life insurance policies, a type of permanent life insurance, offer a death payout and a cash value element. When you pass away, the death benefit will be paid to your beneficiaries, and the cash value portion is an investment vehicle where you can earn interest. A universal life insurance policy will continue to be in effect as long as the premiums are current.
Universal life offers a little bit more freedom in comparison to other kinds of permanent life insurance policies. If adequate cash value has accumulated, policyholders may be able to cut premium payments and adjust the death benefit amount.
Additionally, the cash value component often builds value based on an interest rate based on the investment portfolio or market index of the insurance business. There is a chance to make more money, but depending on the kind of universal policy, the value could potentially decrease if the rate drops. Whatever you save up can be used to pay your premium or increase your death benefit.
Additionally, policyholders have the option of borrowing against the cash value; in most situations, the loan is tax-free but must be repaid with interest. Surrendering the insurance is another approach to get access to the cash value. When you wish to cancel your policy, you might have to pay fines depending on the fine print.
How Much Does a Universal Life Insurance Policy Cost?
Your coverage amount, age, gender, and health are just a few variables that will affect how much a universal life insurance policy would actually cost you. Because a portion of your premiums goes toward the cash value component, you can anticipate paying more than with term life insurance policies.
The longer you keep the coverage, the lower your premiums can be as your cash value increases.
For the purpose of building up cash in the policy, Glenn J. Downing, CFP, Principal at CameronDowning, explains that you overpaid for insurance in prior years. “In later years, you pay less for insurance, and the cash value makes up the shortfall.”
Because insurers utilize these indicators to assess your risk profile, they also have an impact on how much you’ll pay in premiums. Your premiums will often be greater the riskier you are—for example, if you’re thought to be unwell and more likely to pass away before your time.
Assume you are a 30-year-old female who conducts regular exercise and does not smoke. Your premiums will probably be cheaper than those of a 55-year-old woman who has smoked cigarettes on a regular basis for the past 30 years since you pose a smaller health risk. In spite of this, you won’t know your final cost unless you fill out an application.
The precise sorts of coverage you require, a company’s financial stability, and its track record for customer service interactions are just a few examples of the elements that will determine which universal life insurance provider is best for your needs.
It’s a good idea to choose a business that will guide you through the full application process because purchasing universal life insurance could take longer than purchasing other types of plans (you’ll also probably need to undergo a medical exam). Of course, you want to be confident the insurer will be able to pay the death benefit to your beneficiaries. You can evaluate whether an insurance provider will be financially stable in the long run by looking at their ratings.
To ensure you’ll obtain the coverage you desire, don’t forget to check at the sorts of policies and riders offered by each business you consider. Indexed universal life insurance (IUL), variable universal life insurance (VUL), and guaranteed universal life insurance are some of the most well-liked universal life products. Investigate your options to find the one that best meets your requirements, then look for businesses who sell it.