Universal Life Insurance
Universal life insurance is a type of policy that gives you an incredible amount of freedom. If you don't want to pay the same amount each month, for example, you can customize a payment plan. The power is in your hands—but you know what they say about power: it comes with a lot of responsibility. Universal life insurance is no different. Your insurance advisor will work with you to come up with a suggested payment plan, but making those payments are all up to you. Essentially, you choose how much you want your policy to be worth. You can change this amount at any time. The trick is to know how much coverage you need, how much you have available to pay into the account, and how to space out your payments. Because of this flexibility, this type of policy costs more than term life insurance, but less than whole life insurance.
Another interesting type of universal life insurance is called cash value. As its name suggests, this type of police creates a cash value that accrues interest and grows as you pay into the policy. This is your money, and you can borrow against it or withdraw from the account. You can also cancel the policy at any time and the account's cash value will be returned to you.