Universal account is actually a second investment made by the insurance company with part of your premium, which creates more expected annualized income for you. Generally, universal accounts have a minimum guaranteed expected annualized interest rate, which adopts the method of daily interest compound interest, so the expected annualized income will be relatively high.
Extended data
Universal insurance is a life insurance product with variable premium and insurance amount. This kind of product has two functions: protection and investment, allowing customers to make flexible choices in payment methods and policy denominations. Whole life insurance, which includes insurance protection function and sets up an investment account to protect annualized income, has the characteristics of flexible premium payment, adjustable insurance amount and more transparent handling fee.
According to relevant regulatory regulations, the minimum guaranteed expected annualized rate of return for universal insurance accounts is 2.5%. At present, the average expected annualized interest rate of such products on the market is 4%.
Compared with other types of insurance, the cost of universal life insurance is very transparent, and the premium paid MINUS the initial cost, guarantee cost and investment account ratio are clearly written. Insurance companies settle the value of policy accounts monthly (or quarterly in some companies) and announce the settlement interest rate for the current month (quarter).
References:
Baidu encyclopedia-universal insurance