Universal Life Insurance
Universal life insurance is defined as a kind of flexible permanent life insurance that offers low cost protection of savings element and term life insurance that a person invests for providing a cash value buildup. The savings element, death benefit as well as premiums can be altered and reviewed as your circumstances change. Additionally, unlike whole life insurance, here the policy holder is allowed to use the interest from her/his accumulated savings so as to help pay premiums.
This form of insurance was created for providing greater flexibility when compared to whole life insurance. In other words, it allows the policy holder to transfer money between the savings components and insurance of the policy. The insurance company breaks down the premiums into savings and insurance, thereby allowing the policy holder to make adjustments based on their personal circumstances. For instance, if the savings portion is earning a low return then it may be used instead of peripheral funds for paying the premiums. In simple words, you can say that it is similar to combining a term life insurance policy with a tax-deferred interest accumulating savings account.
An advantage of buying a universal life insurance policy is that apart from accumulating a tax deferred savings, you will not have to pay premiums for the complete policy.
Now, the question is who do you think will benefit the most from the universal life policy? Well, as a universal life policy is often termed as an investment vehicle, only individuals who feel they require life insurance into their seventies would benefit the most out of it. This in turn would give the savings section sufficient time for accumulating into an investment. Most of us don’t need a life insurance policy that late in life, hence it would be advisable to opt for a term life insurance policy and make the needed plans accordingly.
If you think that a universal policy will work best for you, then you need to consider a couple of factors like- Try opting for a long term policy as you need to have it activate for a minimum of fifteen years so as to meet the eligibility criteria and getting the policy returns.
Establish contact with a proficient insurance agent who will review options like whole life and term insurance.
Now, that you have the guidelines by your side, go ahead and opt for Universal Life Insurance now.