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Posted: 1 Jun '21

Should I Consider Universal Life Insurance?

Should I Consider Universal Life Insurance?

Life insurance is an excellent investment to protect your loved ones when you pass. When you finally decide to get life insurance, it may surprise you to know that there are several policies for you to chose from, including universal life insurance. In this post, we discuss the pros and cons of universal life insurance to help you decide. Call a Vistaplan advisor today to learn more.

What Is Universal Life Insurance?

Universal life insurance is a type of permanent policy that allows you to make adjustments. You can adjust your premium payments and death benefits. As long as you make the minimum premium payments required to keep the policy active, you can choose how much and when to pay. This flexibility is fantastic but is only available when you have built up enough cash value and made regular payments. 

The Pros 

  • Unlike other permanent life insurance policies, universal life insurance allows you to adjust your payments depending on your cash flow. When your cash flow is high, you can pay higher-than-usual premiums, and when your cash flow is low, you can pay lower premiums or even skip a payment. This is amazing because you get to keep your benefits or increase your cash value without violating the policy terms. 
  • You can pay your premiums with cash. 
  • The cash value of your policy grows at variable rates, which means that you can enjoy higher returns. With a higher cash value, you can access higher loans and create a higher payout to your beneficiaries upon your death. 

The Cons

  • While you can pay low premiums and skip payments, doing this does not provide an excess premium to build up the cash value.
  • Usually, your insurance provider sets a target that can cover your coverage and cash value. When you fail to meet this target premium, the insurance policy provider uses your cash to pay for coverage costs instead of building your cash value. Over time, skipping payments or paying the minimum premium slows the growth of your cash value. 
  • There is a risk of policy lapse if you keep making minimum premium payments or fail to pay low premiums. If you run out of cash, the policy lapses, and your coverage ends. 
  • Even if you can take a loan up to your cash value, the loan accrues interest. 

Universal Life Insurance in Edmonton

Life insurance is an essential investment in your family’s future. Vistaplan is ready to assist with all your life insurance needs. Call our life insurance brokers for universal life insurance in Edmonton.


About the Author - David Motkoski

David Motkosk At the Helm of Vistaplan Financial Group

David is a well-respected insurance advisor with over 30 years of experience helping healthcare professionals, business owners, and their families secure their financial futures. He takes the time to make certain his clients understand the life, disability, and health insurance products they are purchasing, so they can make the right choices for their budgets, plans, and futures. CONNECT WITH ME ON LINKEDIN

Life & Disability Insurance for Alberta Health Care Professionals, Business Owners, and Their Families Since 1983