All About Universal life Insurance: 2009

Friday, December 18, 2009

Update Dec. 18 - 2009 All About "Universal Life Insurance" By Insurance Experts

Unlike term and whole life insurances, this policy blends term insurance and an investment account into one contract. Also its premiums can be increased or decreased, paid when due or at unscheduled dates, or stopped entirely and restarted at the owner's will provided the policy value is adequate to maintain the cost of the insurance.
This type of policy is adapted well to satisfy the changing insurance and investment needs of its owner.
(By Kyle J. Norton)

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Universal Life Insurance Guide

By Linda R Walker

Some of you have probably heard of universal policies used for insuring life. What are they all about and what benefits do universal policies bring to their holders? Well, simply put, universal insurance polices are insurance products that provide coverage for a person's entire life.

Universal insurance policies are a form of whole life products that most of you are quite common with. Term insurance policies provide coverage only for a specified period of time, whether permanent policies require you to pay premiums for the entire life and respectively provides coverage for as long as you live. It is important to understand this difference, because universal policies can be regarded as a combination of term insurance with some of the investment options provided only with whole life policies.

Universal insurance policies are a specific insurance product that targets certain groups of people, while other groups may think it's useless for them. To make it clear to you, here's a short explanation of a universal life insurance policy. Like any other insurance policy used for covering life, universal policies have death benefits that are paid out when the policy holder passes away. This is what both term and continuous policies provide. However, universal policies also incorporate an element, which is more common in continuous policies: an additional tax-free savings account. This account is used to accumulate money over a long period of time, which then can be employed for paying your insurance premiums instead of you. To put it in other words, your policy will start paying for itself over a certain period of time so you won't have to pay premiums for the entire policy term. Besides, this money can be used for other purposes as well, without affecting your death benefit like in case of whole life insurance policies.

But not everyone will find such policies useful. Universal insurance policies are most useful for those who are looking for long term insurance services and plan to have coverage upon retirement. In order to accumulate any significant amount of money at your savings account within universal insurance you'll have to pay insurance premiums for at least 15 years before getting any results. So anyone looking for less prolonged coverage plans or mortgage securing options should look into other insurance products or special investment tools, rather than universal policies. Otherwise, having such a policy for a long time will sure give you certain possibilities that other insurance products.

First of all universal insurance is a relatively cheap life insurance if compared to whole life policies. First of all, you don't have to pay premiums over your entire lifetime as at a certain point when there's enough money accumulated, the policy will start paying for itself. And it won't affect your death benefits, like most whole life insurance policies do.

In order to get the most attractive and useful universal policy you should take your time and compare life insurance quotes for this specific product type. It really pays to shop around, because different companies have different rates and options for their universal insurance polices and you of course want to get the best product for the lowest price. Don't hesitate to see what different companies have to offer and get the policy that attracts you the most.

Linda Walker is leading expert of the team of the famous site dedicated to life insurance. She is well known for her constant professional point of view and she is happy to share it with you.

Article Source: http://EzineArticles.com/?expert=Linda_R_Walker

Risks of Variable Universal Life Insurance

By Mike K. Brown

Variable universal life insurance is one of the most complicated life insurance products. It is one type of permanent life or cash value insurance that features not only lifetime protection but also asset accumulation.

Variable universal life insurance policy could be a very powerful product that can benefit your family if properly used. But it is not for everyone. There are various kinds of risks associated with it. You should be aware of all those risks before you make the investment. Here we list some of the risks:

1. Contract values are not guaranteed.

Your benefits are not guaranteed, and may be entirely dependent on the investment performance of the variable investment options you select. The variable investment options you choose may not perform to your expectations. Poor investment performance could cause your Contract to lapse and you could lose your insurance coverage. Only the fixed rate option provides a guaranteed rate of return.

2. Increase in Charges

When you are reading the product illustration, you may see two columns of cash values. One is based on current charge, and the other is based on maximum charge. Although you may be suggested focus on the current charge, the insurance companies reserve the right to increase each current charge, up to the maximum charge, without giving any advance notice, and this can greatly affect your cash value.

3. Risks of Using the Separate Account as a Short Term Savings Vehicle

Because the Contract provides for a cash accumulation in the separate account as well as a death benefit, you may wish to use it for various financial planning purposes. However, the contract is designed to provide benefits on a long-term basis. Using the cash value in the separate account too soon, your policy may lapse or you may not accumulate the value you need.

4. Risks of Taking Withdrawals

Accessing the values in your Contract through withdrawals may significantly affect current and future Contract values or death benefit proceeds and may increase the chance that your Contract will lapse. Whenever a withdrawal is made, the death benefit will immediately be reduced by at least the amount of the withdrawal. A surrender charge may be deducted when any withdrawal causes a reduction in the basic insurance amount. It is important to note, however, that if the basic insurance amount is decreased, there is a possibility that the Contract might be classified as a Modified Endowment Contract. Withdrawal of the cash surrender value may have tax consequences.

5. Charges on Surrender of the Contract

You may surrender your Contract at any time for its cash surrender value while the insured is living. A surrender charge will be deducted from the surrender proceeds. In addition, the surrender of your Contract may have tax consequences.

6. Risks of Taking a Contract Loan

Accessing the values in your Contract through Contract loans may significantly affect current and future Contract values or death benefit proceeds and may increase the chance that your Contract will lapse.

There are still other major risks associated with variable universal life insurance products such as potential tax consequences and tax law changing. An investor should understand all of the risks before investing in this type of products.

You can find more discussions about the risks of variable universal life insurance and other information by visiting our website Variable Universal Life Insurance Decode. The goal of our websites is to share our knowledge about permanent life insurance with people so they can make cautious decision.

Article Source: http://EzineArticles.com/?expert=Mike_K._Brown

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Sunday, November 29, 2009

Update Nov. 29 -2009 All About "Universal Life Insurance" By Insurance Experts

Universal Life Insurance Explained

By Donald Lusan

Consider universal life insurance. One of the more popular permanent policies is the universal life policy. What is this universal life all about anyway? This policy is permanent insurance which allows for flexibility in premium payments as well as in death benefit amounts. Think of this policy as a savings account with a life insurance policy attached.

Premium Payments

Unlike other types of life policies your premium payments are deposited into a savings account which earns interest on your money. Monthly withdrawals are taken from your account to pay administrative costs and life insurance premium costs.

You can enter into a contract with the company of your choice to deposit money into your account on a regular basis like you do with any other policy. Your premiums can be monthly, quarterly, half yearly or annually. On the other hand, you may choose to deposit larger amounts into your account in a less frequent manner. You can make your deposits in your universal life insurance account whenever you feel the need or desire to do so.

It does not matter which way you choose to go. The important thing to keep in mind is that there always needs to be sufficient money in the account to take care of the premium payments.

The company includes in your contract a minimal guaranteed interest rate on the money in your account.

As long as you keep depositing the minimum amount required your universal life policy cannot fall into a state of lapse.

Savings Element

You may want to know if it would be better to buy term insurance and just put the rest of the money into a savings account. The savings portion of your deposit has a guaranteed interest rate. You can deposit money when you want to. Term life insurance is temporary insurance. You buy a term policy for a specific number of years. If you need life insurance after that period of time you may not be able to qualify for it.

You may want to use your saving plan for a college fund for your children or possibly to top up your retirement fund.

The life insurance attached to your plan, though term based, lasts much longer that the better known term policies. You can keep your universal life insurance policy for the rest of your life. You can reduce the amount of death benefit any time you choose. You can also increase the death benefit but, depending on age and physical condition you may need to prove that you qualify for the additional coverage.

Policy Riders

You can add the waiver of premium rider to your policy. This provides that if you should become disabled for a minimum of 6 months the insurance company will pay your premiums for you for as long as you are disabled, even if it is for the rest of your life.

You can also add the double indemnity rider to your policy which provides double the death benefit if your death occurs accidentally.

For more go to: Universal Life Insurance Policy

For more than 40 years Donald has been known for his extensive knowledge of the life insurance business. He has represented some of the largest and most admired companies in the United States as well as Canada. His advice is invaluable.

Donald's website is: http://www.lifeinsurancehub.net

Article Source: http://EzineArticles.com/?expert=Donald_Lusan

Recommended Reading
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Universal Life Insurance - A Flexible Life Insurance

By Vincent Funfatt Yeong

When you think of buying life insurance, you might have term life and whole life insurance come to mind. However, you should consider the mix of these two policies before you start looking for life insurance quotes. This is universal life insurance.

Definition

This policy also called universal life, it is a type of permanent life insurance that has additional features and advantages; it accumulates cash value through investment of the premium payments, it is similar in some ways and was developed from whole life insurance.

The attractive feature of this policy is that it has flexibility of premium payments, and has greater potential for cash value growth; the buyer has the chance to change the policy to suit his changing needs. In another word, this policy allows the buyer to decide how much of his premiums will be used for the insurance benefits and how much for investment. If things go well, he can increase the investment part of the policy if the market is good, so that he can gain more profit, or if he has financial difficulties, he can use the accumulated cash value to pay for his premium. As a result, the buyer benefits protection and at the mean time can have his premium invested in the market.

Advantages

Flexible protection - it provides the buyer the flexibility to choose the amount of protection he wants, and allows him to increase or decrease the coverage, but increased coverage may subject to underwritten requirements.

Flexibility of premiums - it offers the buyer the flexibility to pay either lesser or more premium depending on the circumstances.

Guaranteed return of money - if the insurance company made profit on investments, the interest return of the cash value will increase, but no matter how bad the investments were, the buyer is guaranteed a certain minimal return on the cash portion.

Tax free death benefits - life insurance proceeds are generally income tax free to the beneficiary in most of the countries.

This policy also has its disadvantages, such as fewer guarantees than whole life insurance, no investment flexibility; the growth in cash value of the policy is limited.

It is said this policy is illegally sold as an investment, and some insurance agents recommended it to their customers because they earned more commission on this product compared to others, buyers are advised to know this product thoroughly before they purchase.

Life insurance is a complicated industry, especially if the product has some involvements in investments, therefore it is advisable not to commit blindly. Find out more or seek advice and information from reliable sources, make your money return, invest sensibly, please log on to universal life insurance or visit us at http://www.indianapolislifeinsurance.net

Article Source: http://EzineArticles.com/?expert=Vincent_Funfatt_Yeong

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Thursday, November 12, 2009

Update Nov. 12 -2009 All About "Universal Life Insurance" By Insurance Experts

Universal Life Insurance - Is it Suitable For You?

By David Smidev

Universal life assurance is a type of whole life insurance, but the premiums are more flexible and the advantages are more adjustable. A number of insurance experts put forward that only those individuals looking for life assurance coverage into their 70s or beyond should buy it.

Once you've decided to buy it, the first step to securing a policy is to observe how much coverage you could afford. The best method to do this is by finding the quotes. When making a decision how much you can spend, keep in mind that with the insurance, you are always able to add more coverage afterward if you want.

Universal life insurance quotes will give all the information you need about insurance rates, exclusions, conditions, and advantages for the policy you are considering. It's commonly a sensible idea to obtain the quotes from some providers to contrast the different coverage choices they have to offer. Once you have the quotes in hand, creating a table for comparison will allow you to decide on the most effective policy for your needs.

It varies from whole life assurance in the amount of flexibility the policyholder has to make adjustments in the policy. With whole life, the death benefit, premiums, and cash value accumulation is fixed at the beginning. With universal life, the policyholder has the choice to increase or reduce the premium amount and increase or reduce the death benefit. For instance, the policyholder can lessen the premiums, should the beginning price become high-priced. If the policy holder wants to increase more cash value or build up the death benefit, he or she can disburse a higher premium.

Universal life insurance isn't the best type of life indemnity for everyone. A number of insurance experts suggest that merely people who feel they'll need coverage until late in life (70s-80s) will totally benefit from the insurance. Study up on the policy's advantages before deciding if the insurance policy is suitable for you.

If you want to get some excellent resources on life insurance, please visit my site on All about Life Insurance or Universal Life Insurance

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Life Insurance - What is Universal Life Insurance?

By Bradley Steffens

Many people are torn between the benefits offered by term life insurance and those offered by whole life insurance. They appreciate the affordability of term life. They also like its flexibility. Term life policies can be canceled with no significant penalties, and new ones started at for different death benefits and different premium amounts.

On the other hand, whole life offers something term life does not: coverage until death. The policy will not expire after a certain number of years, as it will with term life, so the consumer never has to reapply for coverage. As a result, coverage cannot be denied later in life due to age or poor health. The premiums will not rise, either. Because of these guarantees, however, whole life is not flexible. The death benefit and premium amount is fixed at the time the contract is signed.

The solution for many people is universal life insurance. Universal life has been described as a hybrid between term life and whole life, but that is a misnomer. Universal life insurance is a type of whole life insurance, period. It offers greater flexibility and a lower cost than traditional whole life, but it shares whole life's chief characteristics: permanent coverage, premiums that do not change based on age or health, and the accumulation of cash value.

The chief distinction between term life and whole life is the duration of coverage. With a standard term life policy, the coverage is limited to a specific time frame-the term. At some point, either the policyholder expires or the coverage does. If the policyholder dies during the term, the death benefit is paid to the beneficiary. If the policyholder outlives the term, the coverage will cease on the policy end date. Some term life is renewable without a physical examination, but premiums increase based on the age of the insured at the time of renewal. With whole life, the coverage continues indefinitely, until the policyholder dies. Universal life insurance shares this characteristic with whole life insurance. Both are forms of permanent life insurance.

A person can use a succession of term life insurance policies to gain coverage into his or her eighties or nineties. Each time a person renews a term life policy or applies for a new one, however, the cost of insurance goes up, due to the increased death rates among older people. For example, a 30-year-old man get a twenty-year, $500,000 term life insurance policy for as little as $245 a year, assuming he is in excellent health, does not smoke, does not partake of extreme sports or hobbies, and does not travel to dangerous areas of the world. By contrast, a 60-year-old man in similar health and meeting the other criteria still must pay at least $2,525 a year for the same twenty-year, $500,000 policy. A 70-year-old will pay $10,680 a year for the same policy. If a person develops any sort of health problems during the term, the term life insurance premiums stay the same. If the person does not have "renewable" term life insurance, then when the term expires and the person applies for new term life coverage, the premiums increase dramatically. If the person has developed or experienced a serious health problem, such as cancer or a heart attack, he or she may not be insurable at all.

The cost of permanent life insurance does not increase with the passage of time or changes in health. Coverage cannot be terminated, no matter what health problems the insured encounters. The guarantee of insurability accounts for the higher cost of permanent life insurance.

Another main difference between term life and whole life is that whole life offers savings features, while term life does not. Term life, is "pure" insurance. It insures against death, and that is all. Whole life also insures against death, but it also provides a mechanism for the accumulation of cash value, or savings. Universal life also offers savings features.

Early in the life of a whole life or universal life insurance policy, the cost of insuring against premature death is much less than the premium amount. The insurance company deposits the excess amount--less the company's profits and fees--into a tax-deferred savings account. This amount is known as "cash value." These funds are invested by the insurance company. Proceeds from the investments are credited to the account, increasing the cash value. These funds are available to the policyholder in the form of a loan or as a withdrawal. If the policyholder cancels the policy, he or she receives the cash value as the policy "surrender amount."

Universal life differs from whole life in the amount of flexibility the policyholder has to make adjustments in the policy. With whole life, the death benefit, premiums, and cash value accumulation is fixed at the outset. With universal life, the policyholder has the option to increase or decrease the premium amount (within limits) and increase or decrease the death benefit. For example, the policyholder can decrease the premiums, should the beginning price become unaffordable. If the policy holder wishes to build up more cash value or increase the death benefit, he or she can pay a higher premium.

With whole life, the cash value accumulation rate is guaranteed. With universal life, the cash value accumulation is determined by the performance of the insurance company's investments. If the investments perform well, the cash value increases more quickly than it would with a whole life policy. If the investments perform poorly, the cash value will grow more slowly or not at all. Because of the added risks of whole life insurance, it costs less than traditional whole life insurance does.

Many consumers who want the guaranteed insurability of whole life but are afraid of being locked into fixed premiums or death benefits find universal life to be an ideal form of permanent life insurance.

An award-winning author of books for young adults, Bradley Steffens is a frequent contributor to online and print publications, including Gig and Broker Agent Magazine. A copywriter with 25 years experience, he creates website content for health insurance, life insurance, and homeowner's insurance professionals. His most recent book, Ibn al-Haytham: First Scientist, is the world's first biography of the medieval Muslim scholar known in the West as Alhazen.

Article Source: http://EzineArticles.com/?expert=Bradley_Steffens

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Friday, October 23, 2009

Update OCT. 24 -2009 All About Universal Life Insurance By Insurance Experts

Types of Life Insurance - What Kind of Life Insurance Do You Need?

By Ian Reese

Do you know what kind of life insurance you need? The fact is that most people do not. If you're anything like I was then you have no clue. Well when I was looking to purchase insurance I did the leg work for us. Basically there are 3 different types of Life insurance.

They are:

Term Life
Whole Life
Universal Life

Most people don't know that they exist let alone what the difference is.

Term life is simple an insurance policy that will expire before you die if you out live the term. This is used to protect yourself when you are paying off a lot of debt.

Whole life insurance is used as kind of a long term investment as well as a trust fund for your family that will outlive you. It builds a cash value and only expires when you die or stop paying the premiums.

Now universal life is a whole different bird. It has been the topic of controversy. It has very appealing cash value possibilities but they are very risky especially now due to the economy.

I would not risk the universal policy. Really you need to look at insurance as a way to protect your family not as an investment.

Warning: Too many people don't know the facts about life insurance. Don't be one of them. The best thing to do is to start getting quotes from different companies. This does not need to be time consuming. But you must get multiple quotes to eliminate any shady agents.

Are you going to waste your time like most others? Don't waste your time do what I did. Get a Free No obligation life insurance quote.You'll thank me later go to http://instant-life-insurance-quotes.weebly.com. Don't walk, run to this.

Article Source: http://EzineArticles.com/?expert=Ian_Reese

Whole Life, Term, Or Universal Life Insurance - How to Determine What's Best For You

By Will Barnes

A whole life insurance policy covers you for your entire life. Your death benefit and premium in most cases remain the same. Whole life also builds cash value, which is a return on a portion of your premiums that the insurance company invests. Your cash value is tax-deferred until you withdraw it and you can borrow against it.

A whole life insurance policy may be used as a part of your estate planning. Consequently, whole life insurance is a good choice for you if you want to ensure that you have a life insurance policy in place for your entire lifetime and can comfortably afford the premiums, of if it fits within the framework of your estate or retirement plan.

While whole life insurance is designed to provide coverage on the insured for the insured's entire life as long as the premiums are paid and the policy has not been surrendered, term life insurance provides coverage only for a fixed period that is stated in the policy. It can be for one year or up to thirty years. Term insurance premiums are extremely affordable for a person in good health up the age of fifty. After that age, the premiums start to get progressively more expensive. Term should be purchased if you only need insurance for a specific period of time, such as if you want an outstanding fifteen or thirty year mortgage balance paid off in the event of an untimely death.

Universal life is a type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element, like whole life insurance, which is invested to provide a cash value buildup. The death benefit, savings element and premiums can be reviewed and altered as a policyholder's circumstances change. In addition, unlike whole life insurance, universal life insurance allows the policyholder to use the interest from his or her accumulated savings to help pay premiums.

Universal life insurance was created to provide more flexibility than whole life insurance by allowing the policy owner to shift money between the insurance and savings components of the policy. Premiums, which are variable, are broken down by the insurance company into insurance and savings, allowing the policy owner to make adjustments based on their individual circumstances. For example, if the savings portion is earning a low return, it can be used instead of external funds to pay the premiums.

Unlike whole life insurance, universal life allows the cash value of investments to grow at a variable rate that is adjusted monthly. As an example, the Indexed Universal Life may base the performance of its cash values on one of several indices, including the S & P 500 or the Dow Jones Industrial Averages. Moreover while it provides an opportunity for growth, it has guaranteed returns and provides considerable stability. In that it provides both growth potential and a safety net, it is excellent for college planning or retirement supplemental planning.

Keep up to date with timely financial tips and subscribe to the newsletter. Visit http://www.yourinfo.blogspot.com Will Barnes is a financial and personal growth consultant based in Illinois.

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Equity Indexed Universal Life Insurance - The Best of Both Worlds?

By Amy Danise

Although equity indexed annuities have been around for a number of years, equity indexed universal life (EIUL) insurance is a relative newcomer to the life insurance marketplace. EIUL is a spin on universal life (UL) insurance, a popular policy type because you can increase or decrease your death benefit as your needs change and your premiums can be adjusted accordingly. UL policies also build a cash value against which you could borrow or even use to pay your premiums.

The equity indexed concept is relatively simple: the amount of interest credited to your policy's cash value is tied to the performance of a particular index (the S&P 500 is one of the most popular), so that in years where the index performs well your interest crediting rate will rise, and in years where the index performs poorly, your interest crediting rate will fall.

Most policies guarantee that your interest crediting rate will never fall below zero so that you won't lose money (you just won't make it). They also have a cap as to how high a crediting rate they will pass on to you. This range of possible rates is often described as offering "upside potential with downside protection."

How It Works

Typically, the big choice facing life insurance buyers is whether to go with a "safe" universal life policy that offers a minimum guaranteed rate but limited potential for cash accumulation or to go with a more "risky" variable life policy that offers greater potential for earnings but no protection against losses in the market.

EIUL insurance is an attempt to fill the gap between these two approaches. EIUL is universal life insurance in which the cash value is linked to a certain index. If the index is higher at the end of the year, your cash value may go up. If the index stays flat or goes down, your cash value earns the minimum guaranteed interest rate (say, 2 percent). You should note, however, that when your index goes up it doesn't mean that your cash value increase will reflect the full index increase, due to fees, and dividends and capital gains aren't included in the cash value's calculation.

But are these new products the best of both worlds? Let's take a look at both sides of the coin.

The Pros and Cons

One advantage of EIUL is the potential for higher interest crediting rates than a traditional universal policy. Another advantage is that it offers greater protection from market downturns than a variable life insurance policy.

Stephan Mitchell, product & competition analyst for Pacific Life Insurance Co., based in Newport Beach, Calif., points out that while these products are not a cure-all, they can offer "an attractive middle ground for buyers who saw the market downturn of 2001-2002 and are looking for some guarantees." These products can offer some peace of mind to buyers looking for a mix of guarantees and some potential for cash accumulation.

However, there can be disadvantages to having an equity indexed product. The chief disadvantage of an equity indexed product is that it comes equipped with slightly higher risk than a traditional universal policy. Also, the cap rate the maximum rate you may earn limits the upside potential compared to a variable policy and may be changed periodically by the insurance company.

Steven Weisbart, economist for the Insurance Information Institute, also cautions that "the crediting rate system in these products is probably not familiar to would-be buyers and agents." Since there are so many "moving parts" to one of these products, it is sometimes difficult to figure out what the product actually does at first.

EIUL insurance policies do fill a void between the traditional bookends of the modern insurance marketplace, but it would be an overstatement to term them the best of both worlds. EIUL has neither the appealing guaranteed rates of universal life nor the true market participation of variable life insurance. However, EIUL does offer an attractive third option for buyers and may be ideal for folks whose needs have been overlooked by existing insurance choices.

Is It Right For Me?

Equity indexed universal life insurance may be right for you if you fit the following criteria: The potential cash accumulation of variable life insurance is enticing to you but seems too risky and the guarantees of universal life are comforting to you but the potential for cash value accumulation seems too low.

If these conditions describe you, then an equity indexed universal life insurance policy may be an avenue for you to explore. But before deciding on a particular product, be sure to research the insurance company behind it.

After all, the amount of interest you are credited is in the hands of the company and whatever guarantees the product offers are only as solid as the insurer itself. Just as with other types of insurance, always check into the insurer's ratings (A.M. Best, Moody's, Standard & Poor's, etc.) to get a better picture of how strong the company is financially.

Visit Insure.com for a free universal life insurance quote.

Amy Danise is a staff writer for Insure.com. Visit Insure.com for a comprehensive array of comparative auto, life and health quotes, including a vast library of originally authored insurance articles and decision-making tools that are not available from any other single source. Insure.com is dedicated to providing impartial insurance information to consumers. Visitors can obtain instant insurance quotes from more than 200 leading insurers, achieve maximum savings and have the freedom to buy from any company shown.

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Tuesday, October 6, 2009

Update OCT. 06 -2009 All About Universal Life Insurance By Insurance Experts

Unlike term and whole life insurances, this policy blends term insurance and an investment account into one contract. Also its premiums can be increased or decreased, paid when due or at unscheduled dates, or stopped entirely and restarted at the owner's will provided the policy value is adequate to maintain the cost of the insurance.
This type of policy is adapted well to satisfy the changing insurance and investment needs of its owner.
(By Kyle J. Norton)

Recommended Program
Live Your Life Insurance
Teaches You Surprising and Viable Strategies
For Developing Prosperity Through
Your Life Insurance Policy

Universal Life Insurance Policy Definitions
By Kevin Stith

A universal life insurance is a financial resource that provides money for your family in the event that you die. The money that is received by your family will come as a big help, since it will cover funeral costs, childcare, housing and other expenses that are difficult to compensate for without this type of insurance.

But with the many insurance companies and agents in the market today, it is difficult to know which universal life insurance policy is the best for you unless you know about the universal life insurance policy and its definitions as they apply to the policy.

Universal life insurance combines features of the two basic types of life insurance: term life insurance and whole life insurance. This insurance policy provides the whole life insurance’ cash value and the term life’s protection feature. If you have this policy, you will have flexible premiums and death benefits. You can choose to pay what you want and how often you want to make these payments. The amount on the death benefits is also flexible, because you can decide if you want it increased or lowered according to your needs.

Another benefit of this policy is that if in case you need money, you can borrow from it or surrender it in exchange of the cash value. You can do this anytime, since your policy is like a savings account that you can easily access. Aside from this, the source of cash from this policy is usually tax-free or tax-deferred, and the loved ones that you leave will not have to worry about tax, since the death benefits on this policy are free of state and federal taxes.

Getting a universal life insurance can certainly give you numerous benefits. But before you get one, make sure that you understand the universal life insurance policy definitions. If you really want to look further into the details of this policy, you might consult an insurance agent, so you will know if this is the right policy for you.

Universal Life Insurance provides detailed information on Universal Life Insurance, Universal Life Insurance Quotes, Variable Universal Life Insurance, Universal Life Insurance Policy Definitions and more. Universal Life Insurance is affiliated with Free Life Insurance Leads.

Article Source: http://EzineArticles.com/?expert=Kevin_Stith

Variable Universal Life Insurance
By Kevin Stith

Are you looking for a life insurance policy that is permanent but with flexible premiums and options? If you are searching for this type of policy, then variable universal life insurance might just be the right policy for you.

A variable life insurance policy combines features of universal life insurance with several investment options, so you will be able to claim a larger amount for a death settlement than what you can receive from an ordinary policy. This is called variable universal life insurance, because the premiums and investments in this type of policy are not fixed. These are variables because both depend on the present market conditions.

Getting a variable life insurance policy has advantages over other types of policies. If you compare this to universal life insurance, you will be able to see that on the latter, you cannot control your invested cash value. But if you combine universal and variable, you can switch these investments if you want to get a higher life insurance settlement. You can do this two or three times a year.

Another advantage of having a variable universal life insurance policy is that you can have a tax shelter. This means that the money you make through investments is tax-free. This amount will only be taxed when you cash in the policy.

Even with these advantages at hand, you must keep in mind that variable universal life insurance is not for everyone. So the best thing for you to do is to consult an insurance agent and have the policy pros and cons explains to you. You must be able to understand not only the advantages of this type but the drawbacks as well.

Article Source: http://EzineArticles.com/?expert=Kevin_Stith

Universal Life Insurance Quote - Advantages and Disadvantages of Universal Life Insurance
By Elizabeth Newberry Platinum Quality Author

When you think about insurance, two kinds probably come to mind: term insurance and whole insurance. However, before you start looking for quotes, you should also know about the advantages and disadvantages of another kind: universal life insurance. You may find that universal life insurance is the perfect mix of term life and whole life policies.

If you're considering obtaining a quote, you may be a bit surprised to find that there are several advantages to universal policies. First, your universal policy offers permanent protection, unlike a term policy. Second, your universal policy offers accounts for cash value that are low risk. Plus, the cash accumulation is tax-deferred, which means you won't have to pay taxes for the cash your policy accumulates. In addition, your policy's cash value account can also earn interest with market rates. Third, you have the options of withdrawing or simply borrowing from your universal account or policy, a convenience that is similar to a whole life insurance policy. Lastly, your universal life insurance policy offers both face amount and premium flexibilities.

Yet, even though your universal policy will offer flexibility, it will not offer the account flexibility needed to move your money around or invest in different accounts. There is also no guarantee that your policy will earn cash value, nor is there guarantee that it will be in effect when you need it if sufficient premiums have not been paid.

Some people prefer universal because they are sprinkled with the benefits of both term and whole policies. But, before you decide to get a universal quote, make sure you are aware of all the advantages and disadvantages that will come with the universal life insurance policy.

My #1 site for online - insurance quotes anywhere

Article Source: http://EzineArticles.com/?expert=Elizabeth_Newberry

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Thursday, August 27, 2009

Update August 27-2009 All About Universal Life Insurance By Insurance Experts

Unlike term and whole life insurances, this policy blends term insurance and an investment account into one contract. Also its premiums can be increased or decreased, paid when due or at unscheduled dates, or stopped entirely and restarted at the owner's will provided the policy value is adequate to maintain the cost of the insurance.
This type of policy is adapted well to satisfy the changing insurance and investment needs of its owner.
(By Kyle J. Norton)

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What is Variable Universal Life Insurance?
By Elizabeth Newberry Platinum Quality Author

Variable universal life insurance is a type of permanent life insurance. Like regular universal life insurance, it’s much more flexible than whole life insurance. At the same time, it allows you to save tax-deferred interest.

In the name, “variable” refers to the policyholder’s ability to invest the accumulated cash value in a number of accounts. Like all permanent life insurance, variable universal life insurance builds cash value. The policyholder can choose among a wide variety of accounts in which to invest the cash value. “Universal” refers to the policyholder’s flexibility when it comes to making insurance payments. Of course, this flexibility is often based on the policy’s current accumulated cash value. In any event, variably universal life insurance differs from whole life insurance here because whole life insurance policies have a fixed premium. No flexibility.

There are a few ways in which a person can use a variable universal life insurance policy. First, and most obvious, is as a life insurance policy. The policyholder’s beneficiaries will receive death benefits upon the death of the policyholder. Too, a variable universal life insurance policy can be used as an investment tool. The policy’s cash value earns tax-deferred interest, which generically means the policyholder can save and save and save without having his or her savings taxed.

Another way to use a variable universal life insurance policy is to protect money from being taxed, and not just the money you’re investing. This option is used mostly by wealthy individuals who want to avoid the estate tax. These people will give large sums of money to their children, who have their own variable universal life insurance plans, and the money is covered under a gift tax exemption.

Aside from financial protection and tax advantages, variable universal life insurance policies are also beneficial for educational, retirement, and estate planning and saving. With so many options, variable universal life insurance is beneficial to all age groups.

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Term Life Insurance Online
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Article Source: http://EzineArticles.com/?expert=Elizabeth_Newberry

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Saturday, August 8, 2009

Update August 08-2009 Universal Life

Unlike term and whole life insurances, this policy blends term insurance and an investment account into one contract. Also its premiums can be increased or decreased, paid when due or at unscheduled dates, or stopped entirely and restarted at the owner's will provided the policy value is adequate to maintain the cost of the insurance.
This type of policy is adapted well to satisfy the changing insurance and investment needs of its owner.
(By Kyle J. Norton)

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Interest Rates and Universal Life Insurance
By Evan C Davis Platinum Quality Author

Universal life insurance policies provide a flexible insurance solution for those seeking the protection of death benefits. The insured can flex the policy's premiums and benefits during the life of the policy while the policy creates a residual cash value. This allows one to adjust the nature of their life insurance so that it remains consistent with their actual needs.

Whole life insurance policies offer insured parties a guaranteed interest rate on the cash value of the policy. Universal life policies do this as well. For instance, a universal life policy may guarantee a minimum interest rate on the account of X percent. That percentage will be paid regardless of what happens to the insurance companies actual earnings. However, if the insurance company is able to invest premiums in a way that allows them to exceed the X percent rate of growth, they credit the policy of the insured at the higher rate.

This seems like an absolutely winning situation for holders of universal life policies. After all, they are guaranteed a minimum rate of return on the policy's cash value and may actually earn in excess of that rate, allowing them to pay less in premiums for the same level of life insurance coverage.

This feature of universal life insurance policies has contributed significantly to their popularity. However, despite the minimum guaranteed rate of return, interest rate levels can still impact universal life insurance policies detrimentally, making it necessary for consumers to consider all possibilities when evaluating universal products.

Although the insured is guaranteed a minimum rate of increase to the policy's cash value, this perk is somewhat meaningless if an insurance company's assumptions regarding interest rate behavior are proven to be wrong. All universal life policies are written with assumptions regarding the nature of interest rates in mind. If the company is unable to invest at a level producing the anticipated return, premium costs are forced upward to compensate for the shortfall.

This can result in policyholders being forced into premiums they may not be able to afford. This phenomenon is occurring today for those who bought universal life insurance when interest rates were in double digits. Insurance companies based their universal life insurance policies on the assumption that higher interest rates would continue for some time. This has not been the case, and many insured parties have found themselves paying higher and higher premiums in order to maintain their life insurance. For some, these premium increases are unmanageable, forcing them to cancel their policies completely.

Obviously, the risk of interest rate fluctuations makes universal life insurance less predictable than whole life insurance coverage. However, this unpredictability is not necessarily a reason to avoid universal life. If one is cognizant of the risk of premium price upswing if earnings fail to meet predictions and is prepared to pay the increased premiums in such situations, universal life remains very effective.

This is especially true in light of the fact that the alternative would be to simply buy a whole life insurance policy, which would likely require higher premiums payments right away and with no opportunity for relief at any point during the life of the policy.

Universal life advocates argue that the possibility for cheaper premiums when investment out performs or meets projections makes it a more sensible alternative than agreeing to higher premium payments through the entirety of a policy (whole life).

Whole life advocates maintain that the unpredictability of the markets and of interest rates makes universal life insurance products too unpredictable.

In the final analysis, universal life insurance products seem like a winning solution for those who understand and are able to handle fluctuations in the required premium. If one necessitates complete predictability and is able to overlook the possibility of a cheaper premium over the course of the policy, they may decide that a whole life package makes more sense for them than universal life insurance.

Evan C. Davis works in Medicare customer service and is the webmaster and owner of Easy Insurance Finder. Find out about universal life insurance and online universal life quotes at http://www.easy-insurance-finder.com.

Article Source: http://EzineArticles.com/?expert=Evan_C_Davis

How Much Should You Pay For Life Insurance?
By Jane B. Reynolds

So how much should you pay for life insurance? This is a very good question because there are individuals out there paying too much and some who are actually not paying enough because they don't have enough coverage. Fortunately, there is a happy medium here, but it is important that you know what it is.

Paying too much?

How does someone pay too much for life insurance? Well, there are two ways in which this is done. The first is that they have taken too much coverage. The higher the coverage, the higher the premium.

Another reason why individuals pay too much for life insurance is that they have not compared their prices with other companies and they have simply picked an expensive company.

The types of coverage

There are a number of factors that go into what you pay for life insurance. The first is the type of life insurance you buy. You have three types: Term, Whole, and Universal. Term is the simplest and the cheapest. It is not unusual to have a 20 year term policy in excess of $300,000 of coverage for $20 or $30 per month. The reason why it is so cheap is because it is very unusual that an insurance company has to pay out on a term. They are most likely going to pay out on a Whole or Universal.

A Whole life policy is going to be more expensive. As a matter of fact, the monthly premium could be more than double a Term policy for the same amount of coverage. This is because this policy is special. There is an annual dividend that enables this policy to gain cash value. It is also a guaranteed policy that will last for the remainder of your life.

A Universal life policy is a mixture of both Term and Whole and also packs a higher price tag. This is because it is a more flexible policy that allows for changes at any time. You can increase your amount if you need to. This is great when you can only afford a certain premium in the beginning, but can afford more in the future.

Another factor is your overall health when you open the policy. If you're overweight or have a health condition, your rate may rise.

Paying the right amount

To determine what the right amount is, you have to comparison shop. This means that you will need to check with multiple companies. You will have to acquire quotes and compare those quotes. And if the policy specs are not available immediately, ask for coverage outlines from each company so that you can compare the features and the cost associated with those features. If one policy is $68 and has the same exact features as one that is $99 per month, then you know the $68 is going to be more affordable. If you find another policy with similar features for $50 per month, but the $68 has all of the features you need, you know you should be paying $68 per month.

It all comes down to being patient. That way if you're supposed to pay $30 per month, you will find that $30 per month policy.

Jane Reynolds works for life-insurance-settlement.com; a company dedicated to making it easier for you to find quality life insurance in your state. Life-insurance-settlement.com is a directory of life insurance websites and makes looking for life insurance a one stop affair.

Article Source: http://EzineArticles.com/?expert=Jane_B._Reynolds

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Saturday, August 1, 2009

All About Universal Life Insurance By Insurance Experts

Definition
Unlike term and whole life insurances, this policy blends term insurance and an investment account into one contract. Also its premiums can be increased or decreased, paid when due or at unscheduled dates, or stopped entirely and restarted at the owner's will provided the policy value is adequate to maintain the cost of the insurance.
This type of policy is adapted well to satisfy the changing insurance and investment needs of its owner.
1. Flexible coverage
The prime attraction of the universal life policy lies with its flexibility that allows owner of universal life insurance policy to increase or decrease the policy's face amount and evidence of insurability is usually needed for the increases. Its flexible coverage also established a life insurance contract that (subject to an insurability requirement) allowed the policy owner to:
a. Increase or decrease the face amount of insurance
b. Add more lives insured
c. Substitute one life insured for another
(By Kyle J. Norton)

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Life Insurance - Types of Death Benefit of Universal Life
By Kyle J Norton Platinum Quality Author

As we mentioned in previous articles, UL plans are unbundled, the various components of the plan such as insurance charges and earned interest can each be isolated and quantified. Consequently, they are much easier to understand and explain than traditional bundle permanent life insurance products.In this article, we will discuss the types of death benefit of the universal life policy. The type of death benefit dictates exactly how much will be paid out upon the death of the insured in the future. The more common varieties of death benefit structures found in UL contracts are

1. Level
This death benefit remains level throughout the duration of the policy. This option is the least expensive since the risk decreases over time as the fund values increase.

2. Level plus cash value
This death benefit option pays out the balance of the cash value or accumulating fund along with the initial death benefit amount. This option provides a cost-effective means of providing clients with increasing life insurance coverage.

3. Level plus indexed
This death benefit increases annually by either a fixed percentage selected at time of issue or an external inflation index such as consumer price index.

The advantage of this death benefit is that the insured can have a fixed, increasing coverage amount, increasing either by the same percentage every year or by inflation

4 Level plus return of premium.
The return of premium death benefit option is similar to the indexed option. It has the same advantages and disadvantages. This type of death benefit has definite market appeal since the insured's heirs gets back whatever was paid into the plan with or without interest,plus the initial insurance coverage amount.

I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:

Kyle J. Norton

http://lifeanddisabitityinsuranceunderwriter.blogspot.com/

http://life-insurance10.blogspot.com

I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990.

Article Source: http://EzineArticles.com/?expert=Kyle_J_Norton

Understand Investment Options of Universal Life Insurance
By Kyle J Norton Platinum Quality Author

As we mentioned in previous articles, UL plans are unbundled, the various components of the plan such as insurance charges and earned interest can each be isolated and quantified. Consequently, they are much easier to understand and explain than traditional bundle permanent life insurance products. In this article, we will discuss the investment options of the universal life policy. In fact, in order to compete with the mutual fund industry, insurance companies offering UL are increasing the number of their investment options to reflect the various investment types found outside of insurance policies. Here are the two main types of investment options offered within most UL insurance policy.

1. Guaranteed Investment Accounts

These type of accounts are available from daily interest accounts to 10 or 20 year guaranteed interest accounts. They appeal to risk-averse clients who would like to see a steady guaranteed growth within their UL plans without being worried of the fluctuation of the stock market. They are much less risky than Indexed Accounts but they also offer less potential return.

The guarantee may be that the return within the UL will be no less than

a) 80% of the return of the 5-Year government bond
b) Equal the 5-Year government bond less two percent
c) 90% of the return of the 5-Year government bond less one percent

In fact, most UL contract may guarantee that the GIA return will never be lower than a certain amount, say 2%.

2. Indexed Accounts.

The performance of these funds is usually linked to the performance of an outside index or mutual fund. They offer the policyholder the opportunity to participate in more aggressive and riskier investment types. Performance can be linked to

a) The S&P 500 and other stock market index
b) European, Asian and Australian Index accounts or international index accounts that are tied to the performance of some types of world index.
c) Some indexed accounts use the return of some particular mutual funds as the outside index.

The ways in which the return for indexed accounts is linked to the outside index counterparts also vary:

a) The contract may state that the return will be equal to the return of the outside index, less a percentage per year. For example, the return for a S&P 500 index account may be equal to the return of the outside index, less a certain percentage.
b) The contract may specify that the return will never be less than the return of an outside index, less a management fee. For example, an American Index account that guarantees its gain will be no less than the return of the S&P 500 less 2%.

I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:

Kyle J. Norton
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://life-insurance12.blogspot.com

I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990

Article Source: http://EzineArticles.com/?expert=Kyle_J_Norton

Equity Index Life Insurance Guide - How to Find Cheap Equity Index Universal Life Insurance Rates
By James J. Robinson

Equity index life insurance is a form of universal permanent life insurance wherein the cash value is determined by a certain index, like the S&P 500. While this type of policy can appear to be a tad more complex than other types of coverage; it is possible to understand how it works and then find cheap equity index universal life insurance rates if you decide that this policy is the type of coverage that will best meet your needs.

With an EIUL policy, if the index is higher at the end of the year the cash value of your policy will increase. If the index goes down, your cash value will not increase, but instead earn the minimum amount of interest guaranteed in your equity index policy.

Note that the amount credited to your equity index life insurance policy is determined by a number of factors such as participation rate, asset fees, and caps.

The participation rate is a percentage of the increase in the index that will determine how much money is credited to the cash value of your policy.

Asset fees are a stated percentage that is deducted from any positive increases in the index.

Caps represent the maximum annual increase that can be credited to the cash value of your policy.

There are several advantages to an equity index universal life insurance policy. One of the advantages is that you have a greater potential for higher interest rates then a more traditional universal life insurance policy. In addition, an EIUL policy offers you more protection from market decreases than a variable life insurance policy offers.

One of the main disadvantages to an EIUL policy is that this type of life insurance policy carries a higher risk factor than a traditional universal life insurance policy. Also, the cap rate may limit the maximum rate you can earn in a good market compared to the potential earnings of a variable rate life insurance policy. You also may be charged by the insurance company on a periodic basis.

Many EIUL polices come with such choices as a flexible premium payment plan, survivorship life, and a single-premium insurance policy.

To determine if an equity index life insurance policy may be a good choice for you and your family if a variable life insurance policy looks good, but seems too risky for your financial strategy, and if the guarantees of a universal life insurance policy make you feel more comfortable, but you feel the potential for accumulating cash value is too low.

Some of the main features of an equity index life insurance policy include, but are not limited to, tax deferred interest earnings, tax advantaged insurance protection, cash value protection against declining markets, annual lock-in of earnings, guaranteed minimum yearly returns, premium flexibility, and cash value access.

Before purchasing any type of insurance, including an equity index life insurance plan, do some research on any company you may be considering. In addition, compare equity index life insurance features, benefits, and premiums before choosing this or any type of insurance policy. Remember, the amount of interest you will be credited is in the hands of the insurance company you chose to use for an equity index life insurance policy, and the policy is only as solid as the insurance company you select.

You can learn about the financial strength of any insurance company you may be considering at A.M Best, Moody's, Standard & Poor's, and other independent rating companies.

To find cheap equity index universal life insurance quotes and cheap life insurance quotes on other types of policies from various life insurance companies then be sure and compare rates from at least 3 different companies. Visit http://www.CheapoLifeInsurance.com to compare rates easily and try to save yourself some money.

Get started finding cheap life insurance today!

Article Source: http://EzineArticles.com/?expert=James_J._Robinson

Life Insurance - Understand the Cost and Mortality Components of Universal Life Insurance
By Kyle J Norton Platinum Quality Author

UL plans are unbundled, the various components of the plan such as insurance charges and earned interest can each be isolated and quantified. Consequently, they are much easier to understand and explain than traditional bundle permanent life insurance products. Most UL policies are actually distinguished by differences in their separate components. In this article, we will discuss The cost and mortality Components of Universal Life insurance

1. Cost of insurance (COI )

a) Yearly renewable term ( YRT )
The cost of insurance increased every year with the actual increasing mortality risk of the policyholder. These type of universal life policy performs very well in the early years because the cost of insurance charges are low. However, they tend to suffer in later years when the COI charges become very large.

b) Level cost of insurance
A popular alternative to the YRT is the Level COI structure where the cost of insurance is scheduled to remain constant throughout the duration of the policy. The main benefit of this plan is that, although cash values are lower in the early policy years, the policy performs well if clients want safe for retirement. Since UL contracts are long-term protection vehicles, the later higher values are desirable.

c) Hybrid cost of insurance
They have high early policy values due to the lower initial COI, but they do not suffer from severe erosion of fund values later in the policy since ultimate risk costs are capped. Other contracts allow the client to essentially select the mortality component from their term insurance such as term 5, 10, 20, 100 . . . and then shape a UL contract around these COI rates, complete with tax-sheltered fund.

2. Mortality

a) Guaranteed mortality
A popular Universal life policy where the cost of mortality rate of insurance is guaranteed throughout the duration of the policy. The premium is higher than non guaranteed counter part. If they have purchased a UL plan with YRT COI, the amount deducted every year will be exactly as specified in the contract.

b) Non Guaranteed mortality
Since the insurance company is essentially passing the mortality risk on to the client, the initial mortality costs and quite possibly, the future costs can be substantially lower than those charged in a guaranteed contract. This type of plan's advantages is the significant upside potential in the way of reduced mortality costs, but the downside risk is limited by way of the guaranteed maximum costs.

I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:

Kyle J. Norton

http://lifeanddisabitityinsuranceunderwriter.blogspot.com/

http://life-insurance08.blogspot.com

I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990.

Article Source: http://EzineArticles.com/?expert=Kyle_J_Norton

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All About Universal Life Insurance By Insurance Experts

Understanding Universal Life Insurance - Get the Facts Before Making a Decision
By Stan Jenkins Platinum Quality Author

When planning for your family's future and financial well-being you may consider taking out a life insurance policy. This can do more than cut a check to your family upon the event of your untimely death it can also be used as investment vehicles that can carry significant tax benefits. This article is going to discuss Universal life insurance. What it is, how it works, and its use as an investment.

So, what is Universal life insurance? This type of policy offers some benefits and flexibility not allowed by other types of life insurance policies. Universal life is a type of permanent life insurance, meaning that you will be covered until the death benefit has been paid, or you opt out of the policy for whatever reason.

A major benefit of universal life policy is the flexibility that it offers. You may increase or decrease the amount of coverage that you receive. You may also control the amount and the frequency of your payments. You may choose to increase or decrease the premium and you are also allowed to make lump-sum contributions.

Another benefit of universal life insurance is that at accrues cash value. The money you pay in premiums to the insurance company is invested in stocks, mutual funds, and other various investment vehicles intended to increase the value of the policy. The money earned in your policy will also be tax-deferred meaning that as long as the money is invested it is tax-free, you would pay tax on it once a payment has been distributed. However, if you need some cash you may also borrow against the cash value of your insurance policy. Since borrowing money is not considered income you would not pay tax on that money and any interest you pay on a loan may be able to be written off on your income tax return.

The investment possibilities and flexibility of universal life insurance make it a good option for a lot of people. However, you should always consult a competent professional on these types of financial matters.

Get all of the facts before committing to a long term investment. To learn more about universal life insurance or life insurance in general please visit http://lifeinsurancequestions.info

Article Source: http://EzineArticles.com/?expert=Stan_Jenkins

Tax Exempt Vs Non Exempt Universal Life Insurance Policies
By Kyle J Norton Platinum Quality Author

In order for the Universal life policy to be taxed exempt, it must pass the following tests

1. The exempt test

The Exempt Test is used to determine whether or not a policy is exempt. An exempt policy is one that regards as providing primary insurance protection.The test is a comparison of the accumulating fund values or cash values of the actual policy to the fund or cash values of a standard test policy at each policy anniversary. This Exemption test policy is a hypothetical 20-pay policy with endowment at age 85. On each policy anniversary, the cash value of the actual policy is less than, or equal to, the cash value of the exempt test policy.

An exempt policy can become non-exempt in the future if it fails the exempt test at any anniversary, but fortunately, most insurance companies put contractual provisions in their UL plans that guarantee the insurer will take all necessary steps to make sure that the policy remains exempt.

The consequences for a policy owner when the policy becomes non-exempt can be quite serious. Any gains that have been accumulated in the policy at the time of deemed disposition will be taxable to the policy owner in the year in which this disposition occurs. Income earned in the policy after the deemed disposition will be reported for taxation on an annual accrual basis.

2. Maximum Tax Actuarial Reserve or MTAR

This is the amount the insurer can deduct from the universal life policy for all expenses, such as insurance premium, administration charge.. when they calculate their own corporate income tax. For the UL policy remain exempt

a) Its values cannot exceed the MTAR line
b) The face amount or death benefit of the policy cannot grow more than 8% each year.
c) The cash value of the policy at the tenth anniversary and each subsequent policy anniversary cannot be more than 250% of the cash value of the third preceding anniversary.

I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:

Kyle J. Norton
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/

All rights reserved. Any reproducing of this article must have all the links intact. I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990

Article Source: http://EzineArticles.com/?expert=Kyle_J_Norton

Whole Life Insurance, Universal Life Or Variable Life?
By Scott Lunt Platinum Quality Author

You may want whole life insurance but did you know that it is only one type of permanent life insurance? Here's a brief overview of the different types to help you when shopping for a quote.

Unlike term life insurance, permanent life insurance doesn't have a set term that will end and your beneficiaries no longer get a death benefit. What's more, permanent life insurance policies can build up cash value, money that you can receive before you die, and thus are also considered a supplementary investment vehicle. The basic types of permanent life insurance are whole life insurance, universal life insurance and variable life insurance.

With whole life insurance you pay a set premium for the life of the policy. The amount of your death benefit also stays the same. The savings portion is usually a dividend.

Universal life, also known as adjustable life insurance, is a more flexible policy in that you can increase the death benefit as long as you pass a medical exam. Your cash value typically grows at money market interest rates and after awhile can be used to help offset your premium.

Variable life pays a death benefit and also accumulates cash value based on investing in stocks, bonds and mutual funds. Because of this, there is an element of risk.

Permanent life insurance usually costs more than term life insurance because of these features. After you've decided what type of insurance is best for your situation, make sure to get several comparison quotes as rates can vary from one company to another. You can get quotes online from either the life insurance companies' Web sites directly, or through a Web site that allows you to get several comparison quotes at once.

Before you buy, you'll want to thoroughly understand the policy and don't be afraid to ask your agent or the company representative questions.

To get free comparison whole life insurance quotes or learn more about whole life insurance visit LowerYourInsurance.com Scott Lunt is a freelance writer.

Article Source: http://EzineArticles.com/?expert=Scott_Lunt

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