Universal Life Insurance

Definition - What does Universal Life Insurance mean?

Universal life insurance is a specific type of life insurance that legally allows the holder to take sums out of the insurance while they are alive, and pay them back like a loan, or take a deduction on the value of the insurance.

These types of policies gain interest on the invested amounts like a treasury bill or bond would, and the holder could use the interest payments to cover the monthly payments on the insurance policy.

Justipedia explains Universal Life Insurance

There are many legal specifications that exist within a universal life insurance policy. For instance, some requirements govern the rate at which it can be paid into or borrowed against, and the rate of interest able to be gained while still being considered life insurance rather than an active investment.

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