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Universal Life Insurance

What is it and how does it relate to workplace benefits offered by employers?

Universal life insurance combines the best parts of term life insurance and whole life insurance into a single package. The lower rates of term life insurance are combined with the ability of whole life insurance to build a cash value over time. This type of insurance is usually offered as an additional benefit for employees at enterprise level companies to attract the top talent.

Who it is for

Universal protection packages are meant for anyone who is looking for the protection of a life insurance package for a family or simply for asset building. The plans are usually purchased by large companies as a group policy to give to all employees, but individuals can purchase a universal type of protection plan as well.

How it works

The most likely benefit that will be used in a universal protection plan is the death benefit. This is a benefit that pays out a specified amount of money upon the death of the person being insured. This money can be used to offset the costs of death and transfer assets to the other family members more easily. The cash value of the universal protection plan will also become usable by the family of the deceased.

However, the death benefit is not the only benefit that can be used. A universal protection plan can also be used as a security against a loan if it has built up a cash value. No one has to die for this benefit to kick in.

Different types of coverage in existence

The two major types of universal protection plan coverage are those plans that are meant for individuals and those plans that are purchased by companies in order to be a group policy for all of their employees.

Major benefits

The major benefit of a universal protection plan is the ability to pass on assets to family members and protect them financially in the case of an unexpected loss of the breadwinner’s earnings.