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Universal Life Insurance

Universal life insurance is different than other types of life insurance. Instead of being something you purchase for yourself, it is bought for you by your employer. It is a benefit many employers provide alongside other benefits like health insurance and dental insurance.

As long as your employer offers it as a benefit, you are eligible for this insurance regardless of your age or any health conditions you may have. Private insurers can turn you down if you are above a certain age, smoke tobacco or have major health conditions, but companies that provide this form of life insurance must insure you.

Another major benefit of this type of insurance is that it is significantly cheaper than purchasing a policy on your own. A $100,000 life insurance policy purchased on the open market usually starts out at around $20 a month for someone who is young and health. The same insurance plan purchased through an employer may only cost $2 or $3 a month.

The way the insurance works is simple. Your employer contracts with an insurance company to provide the policies to their employees at a discounted rate. Sometimes the employer will pick up all or part of the tab and sometimes you will pay the entire bill yourself. Most employers will pay for a certain amount of insurance, such as $50,000, and allow you to purchase additional insurance at discounted rates.

Most employers purchase term life insurance which is good for a set number of years, usually ten, before the policy renews and moves you into a slightly higher premium category. Employers will occasionally purchase whole life insurance which guarantees you a set premium for the rest of your life. The latter is considerably more expensive.

You get to name your own beneficiary or beneficiaries as with any other form of life insurance. The money will not go to your employer if something should happen to you. Many policies are also convertible, which means that you can take the policy with you if you decide to change jobs or are laid off. Universal life insurance is a great way to provide security for your family if something should happen to you and save money while doing it.