When comparing life insurance options, Jacob Financial Partners, LLC feels it is very important for you to compare rates of universal life insurance to other types of permanent insurance and term life insurance. Universal life insurance is very similar to whole life. With this type of insurance the insurance company takes a portion of your premium and invests it into stocks, bonds, and mutual funds. If they do a good job investing, you participate in the interest earned, tax deferred.
With this type of insurance you are allowed to choose from two death benefit options. The first option pays the death benefit out of the policy's cash value; the more cash value you build up means the company is on the hook for less insurance (and therefore costs less). The second benefit pays the face amount stated in the contract, plus any cash values you accumulated over the years (costs more).