Universal Life Insurance

One of the most misunderstood types of life insurance is Universal Life. Today's plans offer long term guarantees such as 20, 30, 40 years or even up to age 120! The face value amount is guaranteed to remain level and so is the premium for the period of time you select.

Premium paid into a Universal Life policy also creates a cash surrender value that grows at a competitive interest rate. (The current rate is 6.5% tax deferred). This type of insurance gives you the best of both worlds.

The best of both worlds is that it gives you a guaranteed contract (same as term insurance but with longer periods of coverage) and equity buildup on a tax deferred basis.

There are also variations of Universal Life, called Index UL, that offer cash value returns tied to the S&P 500. There is also Variable UL that allows you to invest your cash value (equity buildup) in a variety of mutual funds.