Universal Life Insurance: Is it Right for You
Insurance, insure, risks, life insurance, are you insured?
This words sound familiar, to many people, but have you heard of universal insurance? Universal Life Insurance is a permanent insurance based on cash value. This means that the insurance policy is established with the insurer, and that premiums above the costs of insurance are credited to the cash value. As the policy is debited each month by the cost of the insurance charge (COI), this charge will also incorporate other policy charges, and fees drawn from the cash value incase premium payments of a certain month is not done.
Universal Life Insurance can be viewed as a hybrid between whole life insurance, and variable life insurance, what brings out the difference is that universal life insurance is very flexible, as it does not technically require the policy holder to pay premiums annually from their pocket, premiums can be paid annually, through lumps sum, quarterly, monthly or anywhere in between depending on the insurance agreement. Also the return on investment of universal life insurance is relatively stable compared to a variable policy.
Types of Universal Life Insurance available
Variable universal life insurance- this type of insurance allows the policy holder to have discretion in determining the policy cash investment.
Indexed universal life insurance- in this type of universal insurance, the cash value rate of interest is governed by a standard market index.
Universal insurance can be used for many purposes, some of the most popular reasons why people opt for this insurance are:
- It protects a business in case the owner dies.
- It is able to protect an estate against liquidation
- It can be used as funding for a retirement plan
- Debt coverage, it is used to pay-off personal and other business loans.
Reason why Universal Life Insurance is the best
Transparency- compared to other life insurances where you pay a certain, fixed premium, and you never have a chance of being informed on what the insurances company does with your money, in universal insurance, there are no fixed premiums Payable and you also have a chance to determine how your money is used.
You may be asking yourself, how does the insurance company make any money with these kinds of policies? It does this by making periodic charges against your cash value account, charges may include: administration, loading charge etc… You only get to see the expenses that, your policy incurs.
Flexibility- universal insurance makes it possible for death benefits, premiums, and the cash value to be easily adjusted by the policy holder. And unlike life insurance, universal insurance can be maintained indefinitely.
Guaranteed interest rate- while you protect your family, you are guaranteed a specific rate. It has also an advantage in that; the interest rate in which the account earns will never drop below a specified level.
It is highly recommended for one to have a universal life insurance policy; the long term cost of this insurance is cheaper. It is also flexible and can be adjusted as your needs change, this feature is very important especially to policy holders, whose ability to pay is not guaranteed. Use the Quote to your right to get affordable universal life insurance quotes.