All About Universal life Insurance: All About Universal Life Insurance By Insurance Experts

Universal Life Insurance Vs Whole Life Insurance
By James J. Robinson

What are some of the pros and cons of whole life insurance vs. universal life insurance? How does one decide which type of policy to purchase? Read on to learn some of the basics of both types of coverage.

Whole life insurance and universal life insurance are both permanent types of life coverage instruments.

There are four basic parts to both universal and whole life. The mortality cost, which shows what part of your deposit covers the death benefit of the policy. The administration charges which include the premium taxes and costs incurred by the insurance company to manage your policy.

The savings and investment portion is the amount of money you have left to after the mortality costs and administration charges. This money is sometimes called the cash value, fund value, or cash surrender value.

The fourth part of a whole or universal insurance policy is called the return on the savings. This is the interest rate that is credited to the cash value of your policy every year.

A whole life policy is a permanent policy where the premiums are set at a fixed amount and never change until you have paid funded the policy in full. Also, the amount of the death benefit will not increase or decrease over the life of the policy.

One of the drawbacks to a whole life policy is that the insurance company does not have to disclose the mortality cost or the administrative costs to you. The savings or investment portion of a whole life insurance policy is determined by the excess interest, savings in the mortality cost, the operating expenses to maintain the policy, and you are at the mercy of the Board of Directors of the company who decide what they are willing to pay.

You also can't chose where the money in your cash value account is invested, and the insurance company may not disclose the rate of return to you either.

A universal life insurance policy has flexible premiums, an adjustable death benefit, and the cash value of a universal life insurance policy is interest sensitive, meaning if interest rates increase so will the value of your universal life insurance policy.

In addition, with a universal life insurance policy, the insurance company will disclose both the mortality costs and the administrative costs to you.

The premium levels and the death benefits can be adjusted by you if you choose to do so. With whole life both the premiums and death benefit are set in stone at the time you buy the policy, which could lead to higher returns.

With a universal life policy you can put any excess money into the policy which will increase the cash value of the policy immediately.

In conclusion, if you are more comfortable with a fixed premium and death benefits, then a whole life policy may be your best choice. However, if you want more flexibility and have the time to monitor your policy, then a universal life policy may be your best option.

Whichever type you may choose, always compare life insurance companies, their premiums, rate of return, and customer service. Don't feel pressured to buy a product that you feel may not meet your needs or wants. Shop around for an agent you can feel comfortable with and who is sensitive to your individual situation and life goals.

Get started comparing life insurance quotes now!

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

Whole Life, Term, Or Universal Life Insurance - How to Determine What's Best For You
By Will Barnes Platinum Quality Author

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.

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

Variable Universal Life Insurance – Is It Different From The Others?
By Elizabeth Newberry Platinum Quality Author

A variable universal life insurance policy is a form of whole life insurance.
With a variable universal life insurance policy, not only are you offered
flat-out life insurance, but you are also offered more security and investment
components that are not offered with other kinds of life insurance policies.

The difference between a variable universal life insurance policy and any other
kind of life insurance policy is that not only does variable universal life
insurance offer a cash value element, it offers more flexibility and control
over that cash value element than any other type of insurance.

A variable life insurance policy will insure you for life, and any cash
accumulated with a variable universal life insurance policy is tax-deferred.
This means you will not have to pay taxes on the money you earn.

Admittedly, there are investment risks that come with variable universal life
insurance policies. If your investments are very successful, the person whom you
have named as your beneficiary will be paid a fairly high death benefit.
However, even if your account’s investments are unsuccessful, the person whom
you have named your beneficiary will still be paid a minimum death benefit in
the event of your death. Even more good news? Variable universal life insurance
policies are regulated by Federal Securities Laws, so you can purchase them with
confidence. They even have to be sold with informative brochures so you know
exactly what you are getting.

With all the different life insurance policies out there, not to mention and the
pros and cons of each, your safest bet is to talk with a life insurance agent
before committing to one particular life insurance policy. Express your needs
and the amount you are willing to spend. Be sure to shop around, as well. Get
quotes from several different life insurance agents and find out if your needs
are covered before choosing the one that is right for you.

Visit our site to buy affordable auto insurance, to get Texas car insurance, or to get a individual health insurance.

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

Understand Universal Life Insurance Surrender Charge
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 surrender charge in the universal life policy.

The surrender charge is the difference between the accumulating fund and the cash value accumulated in the insurance policy that the policy holder can access at any time, often called cash surrender value.

Surrender charge schedules are difference between insurers and between the UL plans available from each insurer. Some plans contain a very heavy level of surrender charges that apply for a lengthy period of time of more than 10 years. These charges serve to artificially suppress the cash values of the policy. Other plans have low or no surrender charges at all.

Therefore, if policyholders who may want to access the cash values of the policy early in the contract will prefer to have lower surrender charges in their plan.

Higher surrender charges are not necessarily a negative for all policyholders. Heavy surrender charges are ideal for those policyholders using their UL plan as a means of sheltering funds from tax because:

1. Using low early cash values provides the means for the pricing actuary to inflate future cash values through investment bonuses, thereby enabling much larger cash values in later years.

2. Surrender charges are used to suppress cash values and cash values are usually compared to a test policy during exempt testing. Therefore, the policyholder can deposit larger amounts into the UL plan in the early years and shelter more funds for a longer period of time. For more details, see the Rules and Regulation section later in this course.

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/ and

http://life-insurance16.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

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