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 Explained
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 ReadingLive Your Life Insurance
Teaches You Surprising and Viable Strategies
For Developing Prosperity Through
Your Life Insurance Policy
Universal Life Insurance - A Flexible Life Insurance
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
Recommended ReadingLive Your Life Insurance
Teaches You Surprising and Viable Strategies
For Developing Prosperity Through
Your Life Insurance Policy
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