Universal Life Insurance
How Universal Life Insurance Works
You pay premiums into the policy. A portion covers the cost of insurance; the rest goes into a cash value account that grows based on interest rates or market performance, depending on the type of policy you choose.
As long as there’s enough cash value to cover the cost of insurance, your policy stays inforce — even if you skip or reduce a premium payment in a tough year. That’s the flexibility that makes UL different.
The Three Types of Universal Life Policies
Universal Life (UL):
The foundational version. Cash value earns interest at a rate set by the insurance company, with a guaranteed minimum. Premiums and death benefits are adjustable. Good for people who want permanent coverage with stable, predictable growth and lower risk.
Indexed Universal Life (IUL):
Indexed Universal Life (IUL) Cash value growth is tied to a market index like the S&P 500 — but with a floor, so you don't lose value when the market drops. You participate in market gains up to a cap, and you're protected on the downside. IUL is the most popular option for clients who want growth potential without direct market exposure.
Variable Universal Life (VUL):
Variable Universal Life (VUL) Cash value is invested directly in sub-accounts — similar to mutual funds. The upside potential is higher, but so is the risk. VUL is best suited for experienced investors who are comfortable with market fluctuation and want maximum growth opportunity within their policy.
Is Universal Life a Good Fit for You?
UL tends to work best for people who want lifelong coverage but need premium flexibility — business owners, self-employed individuals, or commission earners. It's also a strong fit for those building tax-deferred cash value as part of a broader retirement strategy, or for anyone who wants an additional tax-advantaged vehicle.
Why Work With Serot Group
We're independent, which means we're not tied to any single carrier. When we recommend a UL policy, it's because it fits your situation — not because it's what we're required to sell. We work with the top-rated carriers in the country and do the comparison work for you.
We have been advising clients on permanent life insurance since 1981. If you're trying to figure out whether UL, whole life, or something else makes sense for you, we'll give you a straight answer.