How Does Universal Life Insurance Work?

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There are a few things you need to keep in mind when choosing a universal life insurance policy. Find out how a universal life insurance policy works with help from a dedicated insurance professional in this free video clip.

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Hi, my name is Doug Levi. I'm principal agent and owner of Strategic Insurance Services. Today, we're going to talk about how does universal life insurance work. Wanna give you three things to think about. Number one, is with universal life insurance you're going to have a death benefit. That means that each month, when I pay my premium, part of the responsibility that the insurance carrier has is they put that money in an account that in the event of my death, they'll be able to pay out my death benefit. Whether that's two hundred thousand, half a million, a million, whatever that is. The second thing with universal life insurance is you're going to have some cash value. So, when I give my money to the insurance carrier each month, again part's going to go to a general account to make sure my death benefit's taken care of, part of that money is actually going to go and sit in a cash value account that accumulates money over time. I use the analogy with our clients to tell them think of it as a long term savings account, that each month and each year it's going to build a little bit more value. It's important that when you obtain a policy, you look at your proposal. That should be outlining what the cash value and the death benefit is going to be. The third thing to keep in mind with universal life insurance, I call it my Gumby policy. And I call it my Gumby policy because Gumby's flexible and that's probably one of the biggest advantages of universal life insurance, is it's flexible. And when I say it's flexible, you're able over time to adjust how much money you can put into the policy. There might be times where you have to put a little bit less money in because money's tight. There might be times when you can put a little bit more money in and see that cash value account grow at a higher rate. That's a big difference compared to a whole life insurance policy or a term policy where whatever my monthly premium is, it is and if I don't pay it after a few months they're going to cancel me. With universal life insurance there's usually a range of payments, subject to a minimum of course, that I can make. This has been how does universal life insurance works. If you'd like more information on life insurance, you can go to our website at Tampa Bay Insurance dot net. My name is Doug Levi. I'm principal agent at Strategic Insurance Services.

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