Universal Life Insurance (ULI) brings together life cover and a savings element. Before selecting a ULI policy, it is useful to ask a few questions. These can give better insight into how the policy works and what to expect in the future.
Here are some questions to ask when looking at ULI insurance.
How are the premiums structured?
Ask about how the payments are handled. Some policies may let you adjust your payments, while others may suggest a set range. It is also good to check how the timing or amount of payments affects your cover and savings portion.
What charges are included in the policy?
ULI insurance usually includes several charges. These may cover the cost of insurance, policy administration, and other features. Request a breakdown of these charges. This helps you see how much of your payment is going toward the savings section and how much is used elsewhere.
How does the cash value grow?
Ask how the savings section builds up over time. Some policies link the growth to a fixed interest rate, while others may use market performance. Find out how often interest is applied and if any conditions apply to growth.
Can the policy be adjusted later?
It is good to know if the plan lets you change the coverage amount or payment schedule in the future. Some ULI plans allow updates, but these might come with limits or extra steps. Ask what adjustments are possible and how they might affect the cash value or charges.
What happens if payments are missed?
Life situations change. Ask what the result is if you miss a payment. Some plans may use the cash value to cover the shortfall, while others might stop the cover. Knowing this in advance helps with choosing a policy that matches your comfort level.
Are there withdrawal or loan features?
Some ULI policies allow withdrawals or loans from the cash value. It’s useful to ask how these features work, what limits are in place, and what effect they may have on the death benefit or policy status.
Is there a guaranteed minimum return?
ULI savings may come with a base return level. Ask if this is included and what percentage is expected. This helps in seeing the lowest value that may be expected from the savings side of the policy.