Best Universal Life Insurance 2025

Universal life insurance is a type of permanent life insurance that combines flexible premiums, adjustable death benefits, and a growing cash value component. Unlike term life, a universal life insurance policy provides lifetime coverage and is often used for long-term financial planning or estate strategies.

A universal life insurance policy offers:

• Flexible Premiums: Adjust your payments as your income or needs change
• Adjustable Death Benefit: Increase or decrease the death benefit as life circumstances evolve
• Cash Value Accumulation: Build savings within the policy over time
• Lifelong Coverage: Maintain coverage as long as premiums are adequately funded

There are several forms of universal life insurance:

• Traditional Universal Life: Offers stable growth based on interest rates
• Indexed Universal Life Insurance (IUL): Links cash value to a market index such as the S&P 500, providing growth potential with downside protection
• Variable Universal Life: Allows investment of cash value into sub-accounts, offering higher growth with higher risk

Each type supports different goals—indexed universal life insurance tends to be popular for balance and flexibility.

An IUL, or indexed universal life insurance, ties cash value growth to a specific index, often the S&P 500. It allows policyholders to benefit from market performance while maintaining principal protection through a guaranteed minimum interest rate.

• IUL policies have contribution caps and participation rates that affect return
• Growth is tax-deferred, and funds can be accessed through loans or withdrawals

A max funded IUL involves contributing the highest allowable premium into an IUL policy without triggering IRS limits (such as MEC rules). This strategy is used to:

• Maximise cash value growth
• Create tax-free income streams in retirement
• Increase the internal rate of return on premiums paid

Max funded IUL policies are often used by high-income earners seeking tax-efficient long-term wealth accumulation.

Universal life insurance can support:

• Estate Planning: Ensures tax-efficient wealth transfer
• Retirement Supplementation: Cash value may be accessed to provide income
• Business Planning: Used for buy-sell agreements or executive bonus plans

Both traditional and indexed universal life insurance policies offer tools to build and protect wealth over time.

* Rate based on female, age 50, $5,000 in coverage

** The total amount of all AGL Guaranteed Issue Whole Life Insurance policies on any person cannot exceed $25,000 in the aggregate.

AI was used in the creation of this content, along with human validation and proofreading.