Universal Insurance
Universal life provides a combination of term insurance protection with a savings feature. The portion of the funds allocated to the savings feature is invested in a tax-deferred account that typically earns interest at rates comparable to prevailing money market interest rates. As cash values accumulate, they can be used to pay part or all of the cost of your insurance, or to increase the death benefit.
The concept here is that you select an investment mix that best suits you as an individual, taking into account the amount of investment risk you are comfortable with, and your financial goals and circumstances. A wide variety of investment options are available, from GICs to options linked to stock indexes. The returns you earn will be positive or negative depending on the return for the underlying investment.
This type of policy is generally non-participating, and is attractive for people who want to actively manage their life insurance policy. Universal life products give policy owners considerable choice and flexibility around investment options, premium level, and death-benefit options.
