What is comprehensive life insurance?


quick Facts

  • Universal life insurance is a permanent policy with flexible premiums and death benefits
  • You can use the comprehensive life cash value component to cover your life insurance payments or increase your total death benefit
  • Monthly universal life insurance rates are higher than whole or term life insurance

You have many options for Permanent life insuranceFinding the right policy depends on your investment strategy and the amount of coverage you need. Universal life insurance (UL) gives you more flexibility when it comes to premiums, death benefits, and investment indexes, but it’s not for everyone.

Keep reading to find out how UL works and if it’s a good fit for your portfolio. We compare different types of universal life insurance policies and quote quotes from the best companies to help you find the right coverage.

What is comprehensive life insurance and how does it work?

Since it is a permanent policy, comprehensive life insurance coverage lasts your whole life. This means that your loved ones are guaranteed to receive a death benefit upon your death as long as you continue making monthly life insurance payments.

Like permanent life insurance, UL comes in two parts — the cost of the insurance (your monthly rates) and the cash value. The monetary value of your policy works like a Life insurance savings accountIt’s where a portion of your monthly rates and anything extra you decide to pay are invested. You can later borrow against it, use it to make life insurance payments, or add it to the death benefits you leave behind.

Unlike traditional permanent policies, you have much more flexibility with universal living. Your premiums and death benefits can be adjusted based on how much you want to pay each month.

Comprehensive life insurance premiums

Global life is kind of Flexible premium life insurancewhich means that policyholders can adjust how much they pay each month in life insurance rates.

For example, any extra money you pay over the amount due each month is added to the cash value of the policy. You can later use the proceeds from your cash value to pay future comprehensive life insurance premiums or increase your total death benefits for your loved ones.

Likewise, if you pay less each month, your insurance company will cover the difference in the cash value of the policy. If you’re not careful, you risk exhausting your death benefits and having the policy cancelled.

Universal death benefit life insurance

If you purchase comprehensive life insurance, you will have the option to choose death benefits:

  • Death benefit level. The benefit amount remains the same throughout the life of the policy.
  • Increased death benefit. Your life insurance company pays the death premium in addition to the cash value.

Increased death benefit policies come with higher monthly rates, but beneficiaries receive the full value of the policy. The downside to choosing a benefit level is that beneficiaries will only receive the benefit amount level, even if your investment increases the cash value of the policy.

Like your premiums, you can also reduce your death benefits as you get older if you no longer need as much coverage. This can lower your rates, but adjustable death benefit options vary by company. Shop around for multiple life insurance quotes to find the type of coverage you need.

The difference between comprehensive insurance and comprehensive life insurance

The biggest difference between Comprehensive life insurance and whole life insurance Is flexibility – you can’t adjust premiums or death benefits for life. You also have the potential to earn more with UL, as different types of public policies offer diversified investment strategies.

However, whole life insurance guarantees a death benefit. When you buy comprehensive life insurance, you run the risk of exhausting your death benefits when borrowing against cash value or using it to cover insurance rates. Find Whole life insurance companies here.

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Types of comprehensive life insurance

If you are interested in UL, it is important to choose a policy based on your investment strategy. How you want to use your proceeds will affect the type of universal life insurance you buy.

For example, you may not want to invest aggressively if you just need extra money to cover future life insurance payments. On the other hand, higher risk investments can pay off if you intend to withdraw cash value later in life.

Consider your options and speak with a financial advisor, as some policies offer more flexibility than others:

The main difference between the different types of comprehensive life insurance is how the cash value is invested. If you want more freedom of choice, buy variable or equity-based life insurance.

Indexed universal life insurance is a good option if you want to supplement your existing 401(k) or IRA investments, but it’s not a solid alternative to either. Learn more about a 401(k) versus indexed universal life insurance To determine if an investment strategy is right for you.

Advantages and disadvantages of comprehensive life insurance

Now that you know the types of public policies available and how UL premiums and death benefits work, is it the right life insurance for you?

The benefits of comprehensive life insurance will outweigh the risks if you have the right financial plan, but you could end up with no death benefits if you misjudge the market.

Consider the pros and cons of comprehensive life insurance before you buy:

UL Pros:

  • Policies accumulate cash value.
  • Cash value has the potential to earn more than an entire lifetime based on the type of investment.
  • You can borrow against the cash value of the document.
  • You can use the cash value to make life insurance payments in the future without risking the insurance policy falling out.

UL Cons:

  • Without the death benefit increase, any proceeds you earn return to the insurance company after your death.
  • You must pay a redemption fee to withdraw funds from the cash value of the policy.
  • You must repay any loans from the policy with interest.
  • Universal life insurance rates are more expensive than term or whole life insurance rates.

What is the biggest drawback of universal life insurance? danger. Your returns to cash value depend on market performance, and growth is not guaranteed. You also have to pay much higher monthly rates for this type of flexibility and coverage.

How much does comprehensive life insurance cost?

Universal life insurance rates are more affordable than term and whole life insurance due to flexibility of coverage and gaining capabilities. The type of policy you choose will also affect your rates, because equity-based life insurance is often more expensive.

However, you can still get competitive quotes when you understand better How do life insurance rating classes work?.

All insurance companies classify policyholders based on risk, and life insurance companies consider your age, gender, and medical history to determine how healthy or high risk you are. Generally, young adults with no health risks get the cheapest life insurance rates.

Men pay more for life insurance, but all genders will see their universal life insurance costs steadily increase as they get older. For example, rates for people in their 50s are three times higher than those paid for people between 20 and 30. Learn more about Life insurance rates by age and gender Find out how these factors affect how much you pay and lower your overall costs.

I realize that your rates will be above average based on the potential for cash value, but you can still get the lowest rates possible when you sign up for a public policy in your 30s or 40s. Healthy lifestyle changes will also lower your rates, so consider quitting smoking and taking steps to lower your blood pressure and cholesterol before you get quotes.

Which companies offer the best universal life insurance rates?

Most major life insurance companies offer comprehensive life insurance policies, but you may have to look for insurance companies with VUL or IUL coverage.

We’ve found the five best comprehensive life insurance companies to get you started:

  • Guardian life. This company offers variable policies, indices and stock indices at some of the lowest interest rates in the market (3.5% minimum).
    • Omaha Mutual. This company offers a global best for life indexed policy, which ensures that your returns are never below zero, even if the market index is negative.
    • Northwestern Mutual. This company offers the best inclusive life changing policy, with a wide range of mutual fund-like investment opportunities.
  • nationally. This company only offers UL, but no medical screening coverage is available for healthy policyholders.
  • state farm. This company only delivers UL but has the strongest customer service and lowest complaints rate compared to the other companies on this list.

Although it is best known for auto insurance, State Farm is one of the most competitive life insurance companies in the country. It offers a unique global joint life policy that covers two people, usually you and your spouse, and is much more affordable than buying two separate policies. Read State Farm Life Insurance Review Find out more and compare prices.

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Minimum comprehensive life insurance

One of the most flexible types of permanent coverage is comprehensive life insurance. Policies last your entire life, and coverage with increased death benefits will leave behind more money for your beneficiaries. You can also borrow for cash value or use it to cover more expensive life insurance premiums in the future.

This flexibility is not without risk, and no insurance company can guarantee that your investment will pay off. You’ll also pay higher rates for UL, so it’s important to evaluate your portfolio and compare life insurance quotes from several companies before you buy.

Ultimately, the UL is not a suitable replacement for 401(k) plans or IRAs. So if you are interested in buying Global Life, we recommend that you speak with your financial advisor.

Frequently Asked Questions

What happens to the cash value in a universal life policy at death?

If you don’t use or withdraw the cash value before your death, your beneficiaries will receive it if you have a policy to increase your death benefit. Otherwise, your cash value proceeds go to the insurance company.

Should I cash out my comprehensive life insurance policy?

Yes, we recommend withdrawing the cash value of your policy if you do not intend to use it to cover your insurance rates later in life. Life insurance withdrawals are not taxed and won’t hurt your credit, but you may have to pay a surrender fee to the company. Learn more about cash value versus recovery value in life insurance.

Who should consider comprehensive life insurance?

Universal life insurance policies work best for those with good investments who want to supplement their existing portfolio. Borrowing against life insurance won’t hurt your credit, which makes it a very profitable strategy if you have enough personal savings to cover a lower death benefit.

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Editorial Tips: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective third party source for all things life insurance. We update our website regularly, and all content is reviewed by life insurance experts.

Rachel Brennan has been in the insurance industry since 2006 when she started working as a licensed insurance representative for 21st Century Insurance, during which time she held her property and casualty license in all 50 states. Several years later, she expanded her expertise in the insurance field, earning a license in health insurance and AD&D insurance as well. I worked for a small health in…

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Rachel Brennan
Licensed insurance agent
Rachel Brennan

Benjamin Carr was a licensed insurance agent in Georgia with two years of experience in life, health and property and casualty insurance. He has worked with State Farm and other risk management firms. He is also a strategy writer and editor with a background in branding, marketing, and quality assurance. He’s been in military newsrooms – literally on the front lines of journalism.

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It has been previously reviewed


Benji Carr

Previously Licensed Life Insurance Agent

Benji Carr



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