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INTRO TO UNIVERSAL LIFE INSURANCE

A universal life insurance policy is one type of permanent life insurance, which means you retain the coverage throughout your life, not just for a specific term. The premiums for many policies are flexible, allowing you to pay more or less, as long as you maintain the minimum payment, to influence your death benefit amount. You can also build cash value with this type of policy.

Types of Universal Life Insurance


While all universal life insurance policies are similar, there are differences in the amount of risk you assume and how the cash value accrues. The four main types are:
  • Traditional. This is the standard, basic type of universal life insurance without special guarantees or investment options.
  • Guaranteed. Using details of both term and whole life insurance, a guaranteed policy has consistent premiums and a guaranteed death benefit for a low-risk option. However, you don't have the capability of significant cash value growth like you do with other types.
  • Indexed. This type of universal life insurance uses a stock market index to determine the cash value growth. You typically get a guaranteed minimum return, but you may also have a cap rate that limits your earnings, regardless of how well the index performs.
  • Variable. If you choose variable universal life insurance, you choose which sub-accounts you invest in to grow the policy's cash value. While this option has a higher growth potential than other types, it carries a greater risk of losses if your chosen investments don't perform well.​

​Financial Benefits of Universal Life Insurance

Choosing a universal life insurance policy can give you several financial benefits beyond the basic death benefit. That includes:
  • Flexible premiums. You can adjust your premiums, within certain limits, to match your current income or increase your investments.
  • Permanent protection. Unlike term life insurance, which only covers a set number of years, a universal life insurance policy gives you lifelong financial coverage. 
  • Investment potential. You can grow the plan's cash value based on how you choose to invest.
  • Tax benefits. The cash value growth earns tax-deferred interest.
  • Tax-free withdrawals. You can access the cash value you earn without paying taxes, which can help you reach other financial goals at different stages in your life. 

​Is Universal Life Insurance Right for You?

Universal life insurance may be right for you if you want a policy that affords lifelong coverage with more flexibility than other options. It's also a solid option to invest in potential with some tax benefits. However, you need to be comfortable taking some risk with your investment, especially if you choose a variable universal life insurance policy.

​Why Choose RGC Insurance

RGC Insurance is your trusted Michigan insurance agency, serving the area since 1990. As a family-owned, independent agency, we offer extensive product knowledge and work with several companies, which allows us to recommend the best possible solutions for your life insurance needs. You can count on us to work hard for you.