Should You Buy Universal Life Insurance?

Universal life insurance is a type of policy that offers permanent life coverage and builds cash value that grows tax-deferred. Many people, who are interested in purchasing life insurance, are considering opting for such a policy.
It is important to know all the advantages of universal life coverage, in order to make a wise decision. After presenting the advantages and disadvantages of such a policy, you will have a clearer picture about universal insurance.
One of the main advantages is the permanent life coverage that the policy offers. You won't have to worry about any expiration date. When it comes to paying the premiums, this policy offers more flexibility than a whole life policy. You can choose when to pay the premiums, in a limited period of course, and you have the possibility to increase the death benefit.
The cash value the policy builds is also an advantage. The policy builds cash value by taking a sum of money from your premiums and depositing them into an account that grows tax deferred. The insurance company will invest part of your premiums for you and you will receive a commission of that investment. The saving account which the policy provides can be useful in many ways. If you find yourself in financial difficulty, you can choose to pay premiums with money from the policy's account. You can also borrow against your cash value and repay the sum latter at an interest.
The downside of universal life insurance is the interest rate. You have little to no control over the money that is invested from your premiums. If the policy goes well, you will have a positive cash value, but if not, you may end up paying higher premiums to keep a positive balance.
Also, saving money using your policy's savings account is good for people who can't manage their finances. There are better ways of investing money. The cost can also be a problem, as you'll have to pay premiums your whole life. Although the policy allows for a certain degree of flexibility concerning the frequency with which you pay the premiums, you will still have to keep paying in order to keep the policy active. In the end, you'll end up paying much more than the death benefit that the insurance company guarantees.
To conclude, Universal life insurance can be both advantageous and disadvantageous; offering flexibility, a saving account and permanent life coverage, but it can also be expensive and unstable.