As we stated earlier, it is possible to actually draw out
the funds that have accrued in the separate account to use for higher education
expenses, during times of financial instability, or for any other reason. The one drawback, however, is that most
insurance companies do charge a fee for taking this money. In addition, if part of your premium is being
paid from the separate account, then taking too much money can cause the
premiums you pay into the policy to go up.
If you are unable to pay the increased premiums of your universal life
policy, then you risk having the policy canceled. In addition, any money that you take from a
universal life policy will have to be paid back into the policy. Otherwise, you will lower the overall death
benefit of the policy.
The Bottom-Line
For some people, they buy a universal life policy to
build-up cash value, then to take it out as they get older. These people do not mind having the death
benefit decreased substantially because they were using the policy almost like
a savings account with the added feature of life insurance. Others, however, use it to build up a death
benefit plus extra cash value to go to their loved ones with the die.
For whatever reason you may purchase a universal life
insurance policy, they have great flexibility and helping power when you may
need it the most. The key, however, is
to talk with a licensed professional to make sure that a universal life policy
and its options are what is needed for your situation.