Universal Life Insurance is permanent and is not contingent upon a job or other elements. While term insurance is much less costly, universal or ‘whole life’ policies can actually accrue cash value over time, often building up substantially over the years. As an added bonus, the value can be borrowed against as a loan should you face being temporarily fiscally challenged. This is not the case with term life insurance.
Term life insurance ends when employment ends or following a specific period of time. If you’re dealing with a long-term illness, the term life insurance may end before you are well, thus leaving your loved ones with nothing after you die.
Conversely, universal insurance can actually get to a point in which it pays for itself due to the interest earned on the value accrued. The policy also stays in effect as long as premiums are paid, whether by you or by your value-added account. Upon your death, the cash value of the policy paid out to your designated beneficiaries, allowing them to care for themselves and other loved ones.
While universal life insurance may be more expensive, the greater benefits can make a huge difference to your loved ones when you pass away.