Be Careful with Universal Life (YRT): Understand Before You Buy
When Bigger Isn’t Always Better
Many people meet agents who try to sell a big, one-time investment policy — something that looks attractive at first glance.
Often, they’re told it’s an “investment insurance” or “tax-free growth plan” — usually a Universal Life (UL) policy with Yearly Renewable Term (YRT) cost of insurance.
These plans can sound exciting because they show potential growth and flexibility. But many people don’t fully understand how YRT premiums work — and that’s where problems start.
How YRT Really Works
In a Universal Life (YRT) plan, the cost of insurance increases every year as you age.
While the premium may seem low at first, it rises sharply after 15–20 years. If the investment portion doesn’t perform well, or if you can’t keep up with the higher premiums, the policy can run out of funds and lapse — leaving you without coverage.
So while the early numbers may look attractive, the long-term affordability and sustainability of the plan must always be reviewed carefully.
Where Many People Go Wrong
Premiums start low but increase over time — often becoming unaffordable. YRT cost of insurance rises every year with age. Returns are not guaranteed, and depend on market performance. If the investment underperforms, your coverage may end sooner than expected. No proper review or understanding before buying a large, complex plan.
At United Life Financial
We also offer Universal Life insurance, but we recommend it only to the right people —
✅ Those who understand how it works,
✅ Those who can afford long-term funding, and
✅ Those for whom it truly fits their financial goals and tax situation.
For many families, a Term or Whole Life plan might be a better, simpler, and more affordable choice for long-term protection.
Our role is to help you choose what’s best for your situation, not just what looks attractive today.
Before You Buy Any Universal Life Policy
Ask your advisor to clearly show:
How the cost of insurance changes every year How long your policy will last if you stop adding deposits What happens under different investment returns What are the guaranteed vs non-guaranteed values The difference between YRT and Level cost options
Understanding these details helps you make a confident, informed choice.
Final Thought
Insurance should give you peace of mind, not pressure.
At United Life Financial, we make sure you get the right coverage — whether it’s Term, Whole Life, or Universal Life — based on your goals, comfort level, and budget.
