All About Universal life Insurance: 2010

Tuesday, August 31, 2010

Update Sept. 01- 2010 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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Exploring the Benefits of Universal Life Insurance
By Chris A. Harmen

There are many options to consider when choosing a life insurance policy. The first step in the selection process is to decide what type of policy to pursue. There are many conventional choices, but financial coordinators have now begun recommending a less typical type of policy known as universal life insurance. Universal coverage offers much more than just a policy. It acts to protect the family after the death of the insured, just like other policies. However, it is the unique features of the universal coverage option that make it different from most traditional options.
What Is Universal Life Insurance?
Universal life insurance is a type of policy that offers the owner almost unsurpassed flexibility and choice. These policies require an unprecedented level of involvement on the part of the policyholder because there is almost nothing fixed about them. They are based upon a cash value account, which the holder may add value to whenever he or she chooses. There is no specified rate at which funds must be added, nor is it standard practice to impose a specified minimum balance. Instead, the holder retains the complete right to manage the balance as he or she sees fit.
Traditional policies tend to lock the insured into an option for an average of 20 years, if not more. In contrast, universal life insurance offers the opportunity to monitor and change the plan every day if desired. Why Cash Value Is Important
Most experts consider the cash aspect to be the centerpiece of any universal life insurance coverage. The account is similar to an account that would be found at a bank, including its ability to gain interest. The cash value is controlled by the person who owns the policy; they can make withdrawals and deposits, just as with any standard savings method. This feature is found only in universal life insurance. Other plan styles do not offer these types of unstructured options.
Because these plans offer an account, owners have unparalleled flexibility. There are many functions included that go beyond a simple deposit or withdrawal. A user can surrender his or her policy, terminating it in exchange for the total sum cash value at that point, less any applicable withdrawal charges. Another option is to take out a loan from the issuing agency. It is essentially a loan against the cash value, but behaves much like a loan from any other common source. Finally, the plan can also be collateral for a loan issued elsewhere.
Paying For The Policy
The account attached to a given plan does not itself constitute a universal life insurance policy. Instead, it is like a dedicated selection of funds set aside specifically for payment of the plan. On a predetermined schedule, the provider will debit funds from that account in order to pay for a predetermined amount of coverage. The provider then sends a detailed and itemized bill to ensure that the owner understands exactly what he or she is receiving.
There is one potential drawback to this system. Because the amount is automatically debited from the account, the owner must keep careful track of the balance. It is possible for this type of policy to lapse because there are not enough funds in the account itself, meaning that the policyholder would suddenly be without coverage. Although an agent may keep some sort of watch over an account, the ultimate responsibility always lies with the policyholder. Of course, the limit on how much can be placed into the tax-advantaged account are very high, so one may deposit enough to have quite a substantial cushion. Proactive measures like this can greatly reduce the risk of sudden loss of coverage.
Who Benefits From This Type of Plan?
Unlike most other policies, universal life insurance offers a unique opportunity to combine investment and coverage. Universal life insurance provides the same package of benefits as any other type of plan, but it has the additional bonus of the tax-advantaged account. For this reason, many individuals choose to purchase a universal life insurance policy for the tax-advantaged investment plan-even though that is not the main purpose of the policy. Money can accrue interest and be withdrawn at will, making it a safe choice that has benefits.
In addition, forward-thinking individuals can use universal life insurance to protect a business in the event of their death. The policy can help keep the business afloat and enable it to benefit from the rest of the accrued money. The same is true for anyone who will leave an estate, as the funds can help pay off estate tax. And finally, starting a plan early in life is an excellent option for retirees. Planning ahead and depositing more than the minimum into a universal life insurance plan can be a great way to ensure security after retirement.
With an understanding of this unique policy, individuals can not only plan for the future, but also for the present as needed.
SEEK INDEPENDENT ADVICE. All information expressed in this article is intended to be general information only. You should not rely upon this general information to make legal, tax, investment, estate or financial planning decisions. No portion of this article is intended to nor does it provide legal, tax, investment, estate or financial planning advice. For this type of advice, you must consult an independent advisor.
Chris Harmen writes for Wholesale Insurance, a life insurance company that connects men and women with many different policy types, including universal life insurance.

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Article Source: http://EzineArticles.com/?expert=Chris_A._Harmen

Sunday, August 15, 2010

Update August 16- 2010 All About "Universal Life Insurance" By Insurance Experts

A 'Fee-Only' Financial Planner's View of Life Insurance
By Lon Jefferies

When was the last time you met someone who introduced themselves as a "life insurance agent?" These days, even life insurance salesmen refer to themselves as "financial advisors." Yet, what advice do you think an insurance salesman will provide? Of course, they will recommend you buy life insurance. To make matters worse, the insurance industry has managed to take something quite simple and complicate it to the point where not even all the people who sell it fully grasp the implications of the product.

So what do Certified Financial Planners (CFPs) who don't collect commissions on product sales think about life insurance? When is purchasing life insurance appropriate?

CASH VALUE vs. TERM INSURANCE

Life insurance comes in many forms. Some policies slowly accumulate a cash value, meaning most of your premium goes towards insurance and a small portion goes towards a savings account. When you surrender your policy you may be able to collect this savings account. These products include whole, universal, and variable-universal life policies.

These policies are commonly presented as an investment. But beware! You should always think of life insurance as an expense. When you purchase insurance, you are buying something --peace of mind. Insurance is a way to ensure the financial security of the breadwinner's family until the family can accumulate enough investments to make insurance no longer necessary. For this reason, insurance is frequently a necessity for young families, and often less necessary for mature families.

Whole Life

Whole life insurance typically requires the owner to pay premiums for the life of the policy. The insurer guarantees that the policy's cash values will increase regardless of the performance of the company or its experience with death claims. With whole life policies, the interest rate applied to the cash value is predetermined and fixed.

Universal Life

Like all types of insurance, universal life pays a death benefit when the insured individual passes. Before death, however, the cash-value grows at varying rates depending on the ups and downs of interest paid on bonds and savings accounts.

Variable-Universal Life

Variable-universal life policies are similar to universal life policies, except the cash value can be invested in mutual funds (called sub-accounts) rather than at the insurance company's current interest rates. However, the fees on these policies can be extremely high and in almost every circumstance there are more efficient strategies.

Term

Policies with 100% insurance and no cash values are called term insurance. This is the type of policy most people picture when they think of insurance. You simply pay the premium and collect a benefit in the event of death.

Although there is no savings element to term insurance, remember you are buying insurance to ensure your family is taken care of if something happens to you. In most cases there are more efficient ways to save and plan for retirement than through the purchase of cash value insurance policies.

Insurance or Investment?

A phrase you may have heard when considering insurance is to "buy term and invest the difference." (You likely don't hear this from insurance agents because they are paid a higher commission on cash-value policies. The salesman's commission on cash value policies is often 90% of your first year premium.) To implement this strategy, buy low-premium term insurance from a highly-rated insurer and put the money saved from not buying a cash-value policy into a true investment account like an IRA, Roth IRA, etc. This provides your family with the protection it needs and an efficient way to save for retirement. Hopefully, over time, the investment account will grow and the need for insurance will be eliminated.

Most fee-only financial planners are proponents of the "buy term and invest the difference" strategy. However, there are certain occasions when a cash value policy may make sense. For instance, buying a cash value policy may be appropriate if your need is permanent, such as caring for a special needs child. Additionally, cash value policies may make sense if your need is certain, such as if you have the policy and are then diagnosed with a terminable disease. However, if you need a cash value policy, look for a no-load policy that doesn't pay the salesman a commission. This can cut your premium in half and you won't pay penalties when you withdraw your cash value.

Canceling a Policy: Prepare to Pay

Canceling a term policy is simple - just stop paying the premium. If you cancel a cash value policy within 10 years of purchase, you will generally pay a penalty (called a surrender charge) when you withdraw your cash value. If you cancel a variable universal life policy, you will also pay ordinary income taxes on the profits inside the policy. Chances are your insurance agent forgot to mention this.

Bottom Line

Insurance is clearly a complicated product, but for many, it is a necessity. However, remember that insurance agents are financially motivated to sell you insurance, regardless of your circumstances. Always speak to a fee-only Certified Financial Planner, who is never compensated based on the product recommended, to get an objective opinion of whether you and your family have adequate insurance coverage.

Lon Jefferies is an investment advisor representative with Net Worth Advisory Group, a fee-only financial planning and investment advisory firm in Salt Lake City, Utah. He specializes in developing custom financial plans, implementing investment strategies, and providing ongoing support and service in order to help clients reach their financial goals. He can be contacted at (801) 566-0740 or lon@networthadvice.com. Visit the Net Worth Advisory Group website at http://networthadvice.com and read Lon's blog at http://www.utahfinancialadvisor.blogspot.com.

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

Wednesday, July 28, 2010

Update July 29- 2010 All About "Universal Life Insurance" By Insurance Experts

Variable Universal Life Insurance - The Pros and the Cons
By Wendy Moyer

How would you like insurance protection combined with the ability to make a substantial amount of money? If so, a variable universal life insurance policy could be what you're looking for because it offers you a combination of insurance protection along with an investment opportunity.

Although you will get the same premium flexibility that a universal life insurance policy offers, you will also enjoy a broader range of investment choices than are available elsewhere.

An Overview of Variable Universal Life Insurance

This type of insurance policy offers you a lot of flexibility. Once you've made your initial payment you can then make additional payments in any amount and at any time you want. However, although your payments are flexible they still are subject to specific maximum and minimum amounts.

And if you don't make any payments your policy will be in effect for as long as you have enough cash value in it to cover your monthly insurance charges.

Depending on your aversion to risk, you can invest your premiums into one or more of the investment portfolios that the plan offers. These investment portfolios offer you the potential for long term growth along with tax deferred earnings. You also can enjoy the flexibility of making tax free transfers from one portfolio to another.

And your options don't stop there because you also have a choice of death benefits. Either you can provide a level benefit that equals the original face amount of your policy or you may opt for a variable benefit. The variable benefit will be the original face amount of the policy and your policy account value.

What are the Advantages of a Variable Universal Life Insurance Policy?

There are three major benefits that a variable universal policy offers.

1. Because you have so many different investment portfolios to choose from you have the greatest potential for growth - more than with any other kind of life insurance policy.
2. Within limits you determine when you make your premium payments and the amount you pay.
3. You have the flexibility of increasing or decreasing the face amount of your policy.

What are the Disadvantages of a Variable Universal Life Insurance Policy?

Risk goes hand-in-hand with the flexibility this plan offers.

1. If you make poor investment choices you may have to increase the amount you pay in premiums.
2. If your investment choices do not perform as you anticipate it is possible that your insurance policy will lapse.
3. You run the risk of having problems funding your policy because of the flexibility it permits. Since you can skip payments and may experience negative returns there is the potential of losing the money you have invested along with the insurance coverage that you want.

Because of the inherent risk involved with this type of an insurance program it would be in your best interest to consult with a qualified professional before making your investment. And make sure to read the prospectus in its entirety. Also be sure to have all of your questions answered before investing or sending any money.

And to find out more about variable universal life insurance and to get more free advice about life insurance, go to http://www.MikesLifeInsuranceAdvice.com

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Monday, July 12, 2010

Update July 13- 2010 All About "Universal Life Insurance" By Insurance Experts

Universal Life Versus Whole Life Insurance

By Denise M

Permanent life insurance comes in many flavors, two of which are whole life and universal life insurance. All permanent policies offer a cash value component in addition to the death benefit. Most permanent life consumers find it difficult to choose between these life insurance policies, because each comes with its own advantages and disadvantages. This article will give you a better idea of the differences between the two policies.

The basics of whole life and universal life policies

Both these policy types have 4 basic components:
- The mortality cost (the part of your premiums that actually goes towards your life insurance, or the death benefit)
- The cost of administration and policy maintenance: Since part of your payments is used to build up a cash value, separate from the death benefit, this cost will cover the life insurance company's expenses in managing your account.
- The cash value (also referred to as fund value or surrender value). This is the amount left over in your account after the above-mentioned costs have been paid. This is the savings and investment component of your policy.
- Finally, you are also entitled to an interest on your savings and investment. These are the returns from your policy, and will be credited to the cash value component of your policy every year.

Whole life policies
Whole life is the basic variant of permanent life. In the past, whole life and permanent life were synonymous terms because whole life was the only type of permanent policy.

In a whole life policy, the amount of premiums and the amount of death benefit remain fixed for the life of the policy. You will have no say in where your money is invested, and the life insurance company is under no obligation to disclose the rate of return on your policy. The life insurance carrier is also not entitled to disclose the amounts of the savings and administration cost components to you. The savings will depend on factors such as savings in the mortality cost, excess interest, operating expenses, etc. and your cash value component will totally depend on what the insurance company is willing to pay you. This is a major drawback of whole life policies.

Universal life policies
Universal life is a more recent variant of permanent life policies. It offers the policyholder a lot of flexibility in terms of how and where they want to invest their money. The premiums are flexible, and the death benefit is adjustable. However, because they are totally dependant on market performance, the cash values of universal life policies are interest-dependant, and therefore high risk.

In a universal life policy, the details of the components of the policy are transparent and the life insurance company will disclose the mortality cost and administrative cost to you. Universal life policies are often compared to mutual funds, but one must remember that any money inside a life insurance fund grows tax-free, while mutual fund gains are taxable.

Whole life Vs Universal life
Now that we have understood the basics of both policies, it is time to discuss the pros and cons of each of them.

Whole life policies are straightforward for the policyholder. Both the premiums and death benefit are decided in advance, so the returns are guaranteed as long as you regularly pay your premiums. On the contrary universal life lets you add to the policy whenever you have excess cash reserves. The premiums and death benefit are not cast in stone. It all depends on how much the policyholder wants to invest, and how well the investments perform.

Because universal life policies' performance is market-driven, only those who know the intricacies of the stock markets usually buy them. The risks are high, but there is no ceiling on how much your cash value can grow to. However, a wrong decision could see your cash value reserves deplete considerably. Further, in periods when interest rates drop and stagnate, the cash value too, drops, meaning you will have to pay a higher premium to bridge the gap. It is all left to how well you can direct your investments. It is therefore not for everybody, and the average consumer prefers to opt for whole life policies instead.

Both policies have high administration and mortality costs. Whole life policyholders are not given the breakup of their costs, whereas in universal life these charges are made transparent.

Both policies have high administration and mortality costs, but on account of being life insurance policies, investments in both are tax-deferred.

Which permanent life policy is best for you?

The intent of whole life insurance is usually a genuine need for life insurance, coupled with the expectation of cash returns on your investment. However, in universal life, the intent is more often than not, return-driven. Whole life is a safe and guaranteed investment, for those who are more comfortable with a fixed premium and death benefits. However, for those who are looking for more flexibility, have knowledge of the stock market, and the time to monitor their investments, universal life policies are an excellent choice.

Before buying a life insurance policy make sure you go through all the available avenues, and study the benefits and features of all permanent and term insurance policies. Always compare life insurance policies and only buy from reputable life insurance companies.

About AccuQuote:
AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

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Wednesday, June 23, 2010

Update June 23- 2010 All About "Universal Life Insurance" By Insurance Experts

Which Kind of Life Insurance Should You Be?

By Marilyn Katz

Which Type of Life Insurance Is Best?

I cannot answer a general question like the one above. Instead, we need to be asking about the kind of life policy that is best for a person like us. Our choice will depend upon our financial goals, budget, and unique situation. Learn a little about the different kinds of coverage so you can make a good decision..

Term Life Insurance

This is very popular these days. Look at some obvious advantages to term policies.

Premiums are generally lower. Because it is cheaper, you may be able to afford a larger policy.
It is considered pure insurance. You will not be paying for any extras like a cash value.

Understand why term is cheaper. Since it is pure coverage, there will not be asset growth with a basic policy. It is also temporary, so an insurer is taking a shorter term risk. They are going to underwrite you in some way before they offer a policy, and they expect you to survive the term! They also anticipate that some percentage of clients will drop their policies before the end. This all factors in when the companies set their rates.

Whole Life Insurance

Sometimes this also also called traditional or straight life. It is considered permanent coverage. This means your policy will cover you as long as it is kept active. Keeping it active usually just means that the premiums are getting paid.

This type of policy will cost more. The insurer takes a larger risk. In addition, many whole life policies can build up a cash value that can be cashed in or borrowed against. Permanent policies may also be used in life settlements. So while a whole life policy costs more, it may give you more value.

Universal Life Insurance

This is a new type of life policy that has only been around a few decades. It is also permanent coverage, but it is different than whole life. It separates out the savings or investment aspect of the account from the actual insurance portion of the account. Because of that, it can be very flexible and useful for financial planning as well as coverage.

For example, with universal life, you may have flexible premium payments. You can pay a minimum payment that will keep the life insurance in force. You can pay a target premium which will help you meet some financial goal. You will also have a maximum payment you should make to comply with regulations.

Which Kind of Life Insurance Is Best?

Again, there is no one right answer. Many people just want to buy an insurance policy, and they have specific goals in mind. They may choose a term policy. Others want to make sure they are covered their whole lives, and do not mind the policy could also build a cash value. These people may want to consider whole life. Others choose to use their policy as insurance and a financial investment tool. Universal life is more attractive to them.

Now that you know a bit about the different types of life policies, you can start figuring out what will serve you the best.

Would you like to learn more about the different types of life insurance policies?

Visit us at Term Vs Whole life insurance to get more information about term, whole or universal life.

We can also help you find discount term life insurance quotes with our simple and safe online forms.

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Wednesday, June 2, 2010

Update June 02 - 2010 All About "Universal Life Insurance" By Insurance Experts

Analysis of Universal Life Insurance Sales - Variable Life is Now a Gamble - Crisis For Clients

By Donald Yerke

Individual life insurance sales of variable life and universal life is a gamble for clients. Current analysis also reflects a reluctance of agents making large variable or universal life sales. Which crisis is worse? Should agents quit pushing variable life insurance, or are clients just being overly skeptic? Here is the information you need to decide.

In the first three months of 2009 life insurance sales premiums did not become paralyzed. Instead, sales plunged to where premiums are down over 25%. This is a level not seen since the early 1940's.

Term insurance, which typically has no cash value, has little change noted. This means there is a reason for the market based cash value policies of universal life and individual variable life sales experienced a drastic beating. These policies are very risky during a period of an economic downturn. The first quarter of 2009 is a wake up call. Variable Universal Life sales premiums equaled only 40% of the amount collected during the last quarter of 2008. Variable Life, not as risky as variable universal life, countered with a decline of about one-half as much.

Insurance representatives were stunned by client reactions, and in many cases did not present variable products to their potential clients. Many clients having been burned stuck to purchasing the less fluctuating vehicles of term life insurance and whole life.

As a result, the so-called "financial experts" were burned on sales and commission earnings. The positive analysis of this is the fate of insurance agents not truly qualified to sell financial asset related sales. Thousands of these agent trainees left the business or started selling basic products like those that they should have done at the beginning.

The final analysis is that people will continue to buy life insurance for protection purposes. However, consumers will stay more cautious when viewing insurance as a super investment vehicle. In turn, sales agents making variable universal life, variable life, and equity indexed annuity sales will be more careful in explaining the risks that go along with the sale.

Well published author, Don Yerke likes to concentrate on what you don't know or what no one else dares to print. Tell it like it is. Watch for his new paperback book debuting on Amazon this summer. It is loaded with great insurance marketing, brokerage, sales, and recruiting information. Come and get your FREE "Think and Grow Rich" Ebook by Napoleon Hill instantly. The website address is http://www.agentsinsurancemarketing.com. Save more than 60% Visit the website to get a package of Ebooks at under $1.99 each.

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Friday, May 14, 2010

Update May 14 - 2010 All About "Universal Life Insurance" By Insurance Experts

About Universal Life Insurance

By John Kovats

Many people have heard the terms whole life, life insurance and term insurance. These terms have been around for over 100 years in the life insurance world. Universal Life Insurance has only been in the marketplace for the last 25 years. It was developed to meet the changing needs of the consumer.

Term insurance was developed to protect individuals for a definite period of time or "term". One of the advantages of term insurance is its considerable low cost. The big disadvantage, of course, is when people get to be over 60 it is quite expensive and therefore difficult to fund when probably needed most. Most term insurance is expired before people die.

Life insurance covers people until age 100, thus "life". There are reserves established by insurance companies to offset the increasing costs of insurance protection as people age. Thus "cash values" developed. They were paid to the beneficiaries as "part" of the death benefit. The cash value was actually the property of the insurance company.

Universal Life Insurance was developed to show people very distinctly what the "reserve" or investment portion of an insurance policy was, and the "cost" of the annual insurance. Universal Life allows a person to select the amount of premium they want to pay, falling within a range of allowed minimums and maximums. Premiums that are paid above the actual cost of insurance go into an investment fund that belongs to the policy holder rather than the insurance company.

Universal Life programs allow people to pay additional funds into an investment account and actually prepay their insurances. There are some definite tax advantages which this article does not have the space to address. As well, people can adjust the amount of insurance which is required at different points in their lives, and only pay for the coverage they need, at the times they need it.

Universal Life is probably one of the most flexible life insurance plans that has been developed. They are transparent and easy to understand. Make sure you use a qualified Independent Broker who is experienced with this type of product and you will be able to see how you can use this plan to meet your needs. We have further information and videos on our website dealing with this subject matter.

Writer: John Kovats, CLU

The Benefit Guys

April 2010

John has been in the insurance Industry for over 25 years. He came through the agency system and then moved on through the independent broker side. He has developed brokers across Canada, and developed products for distribution. He has his CLU designation and is a Co-Founder of The Benefit Guys.

http://www.thebenefitguys.ca

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Friday, April 23, 2010

Update April 23 - 2010 All About "Universal Life Insurance" By Insurance Experts

Choosing Term Or Universal Life Insurance

By Joaquin Costa

When choosing term or universal life insurance, to choose the wrong one could leave your family without financial resources during their worst time. It truly can be a bit confusing as to which one you need, but all it takes is a little research and some planning to make a responsible and proper choice.

One question that needs answered up-front, is whether or not you actually need any life insurance. The bottom line is that it comes down to a matter of money. If the death of any one family member, would throw a financial hardship on a family, then life insurance is crucial. When thinking of the financial matters, they are things life funeral expenses, college tuitions, or any debts that will be outstanding. If you happen to be single and no children or dependents, then you can consider this choice to be optional.

After you have decided to buy some life insurance, your next decision is to choose what kind. A good reputable agent can be an invaluable ally in this decision. They can help you to understand all the details and costs involved with the various policies.

Term life insurance policies are about the most flexible types available. They can also be the most economical. They are designed to keep basic coverage over a set period of time with no savings built in. So you would have no return on your premiums that you pay over the years.

The rates on your premiums with a term life insurance policy varies from one policy to another. They can be purchased for terms from 10 to 30 years, with a renewable option. This flexibility for the terms is part of their appeal.

One example would be a couple with a child just going off to college. And they want to be sure that the tuition will be paid should they pass away unexpectedly. They can purchase a term insurance policy for the duration of those years. They can be set up short term, you don't always have to take one out for a lifetime. And the amount of coverage is just as flexible.

One of the main disadvantage of these term life policies, is the fluctuations of their rates. The premiums sometimes start out low, but as their policyholders age, the rates go up. And for those who desire to renew these policies once they lapse, the fees for this can be a bit daunting.

Universal life insurance policies will pay any necessary death benefits, and at the same time they provide a cash savings tax-deferred benefit. For the most part, these policies require that you keep them for at least a minimum of fifteen years before there is any substantial return from the savings. They are long term investments and can be borrowed against or cashed out.

The rates for universal life insurance premiums stay constant throughout the life of the policy. The rates are a little higher than some other policies due to agent commissions, but there are some plans where they drop as the policyholder ages. And unless this policy lapses, you won't have to deal with any renewal fees.

You are sure to find financial experts who say that you can find better investments than life insurance. But there are many others who recognize the benefits of a universal life insurance policy as a sound investment.

So the next step is to understand more about life insurance cost and how to find the best deal for you and your family.

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Thursday, March 25, 2010

Update Mar. 25 - 2010 All About "Universal Life Insurance" By Insurance Experts

Get Universal Life Insurance to Provide For Your Loved Ones Tax Free

By Wendy Moyer

For some reason lots of people give life insurance a bum rap. Although it's often been disdained and maligned, it is actually one of the most unselfish things someone can do to protect their family, spouse, or business partners.

To put things in perspective, most people tend to collect assets as they get older. The reality is the more assets they gather the less need they have for a traditional life insurance policy. However there is a price to pay for your assets - taxes. And there are now a number of attractive insurance products that focus on helping you build your cash in a tax sheltered environment.

One of these products is universal life insurance. If you are debt free and have maximized your retirement savings plans - 401-K, pension, IRA, etc. - then this is one product that merits your consideration.

Are You Receiving Investment Income?

If you receive investment income you know that a very high percentage of that money usually goes towards income tax. And if you earn interest income you are well aware that it is being taxed at the highest possible rate.

If you're concerned about your guaranteed investment contracts (GICs) you can rest assured knowing that it's possible to hold them within your universal life insurance policy on a tax sheltered basis. In addition you can use one of the indices to outside indicators, such as the S&P 500 index, or the Morgan Stanley Capital International World Index, or even a combination of indices.

Are There Limits On Deposits?

There are limits on the amount of money that you can deposit into your tax sheltered universal life insurance policy. However there are a number of ways you can affect these limits.

First of all, the limits are primarily determined by the size of the plan you decide to buy.

In addition, should the investment component exceed the limit set by the government it is possible for you to buy the policy on the side by increasing the face amount of your policy, stopping any additions to the policy, or making withdrawals.

A universal life policy is a rather complex product and you should seek professional advice before going ahead. With that in mind, here's an example of what a policy like this might offer you and your loved ones.

For the sake of illustration, let's presume you and your spouse are sixty-five years old and don't smoke. Also, you are interested in creating a $3,000,000.00 tax free estate. It can be done if you deposit half a million dollars into your plan and use a rather reasonable 7% interest rate assumption.

Your money will be tax sheltered as you deposit $100,000 per year over the next five years into your plan.

Upon your demise your universal life insurance policy will pay out $3,000,000.00 tax free to your beneficiaries. This will give you the flexibility of leaving your taxable assets to the charities of your choice - on a tax free basis - while simultaneously leaving your children your tax free insurance policy. In other words, the charities win, your children win, and the government gets nothing.

And for more universal life insurance advice , go to => http://www.MikesLifeInsuranceAdvice.com

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Friday, March 5, 2010

Update Mar. 05 - 2010 All About "Universal Life Insurance" By Insurance Experts

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

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Friday, February 12, 2010

Update Feb. 12 - 2010 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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Sunday, January 24, 2010

Update Jan 23 - 2010 All About "Universal Life Insurance" By Insurance Experts

Universal Life Insurance Quote - Advantages and Disadvantages of Universal Life Insurance

By Elizabeth Newberry

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

When is Money Paid On a Life Insurance Policy?

By Michel B.

With all the different types of insurance policies it can be difficult to your beneficiaries to determine how your insurance will pay out. Beneficiaries are designated by the policy owner to receive the benefits upon their death. Policies can be paid out in either a lump sum or an annual payment.

The standard payout is in a lump sum to the beneficiary after the death of the insured. Annuities may also be set up to make payments either over time or in a lump sum to the policy owner. Payout methods are determined at the time of purchase and are defendant upon the policy type. Annuities are chosen by some individuals as a way to invest for retirement. Policies are paid for either in full at time of purchase on in payments at the time the annuity matures the policy owner is paid back with interest.

Life insurance policies can be found in many forms that will suit your needs. Policy types include term life, universal life, variable life and whole life. Endowments are policies that payout to then insured with the policies term ends or matures or to the beneficiaries if the policyholder dies. If a trust has been set up the payout is deposited into the trust and the terms of the trust of the policy owners will determines how the proceeds of the policy is paid out to the beneficiary.

Variable or Universal life accumulate a cash value they the policy owner may borrow against without an affect of the death benefit. If the policyholder dies before repaying the loan the payout will be the cash value minus the outstanding loan balance. The death benefit will be paid out as long as the premiums have been paid and are up to date. These policies are flexible it the terms of premiums.

Term life insurance has a specified number of premiums, or term, along with a determined premium amount and a specified face value. When the end of the term has been reached the policy expires. The policyholder may be allowed to renew the policy for additional premiums. Term life policies do not have a cash value they only pay out on the event of the death of the insured.

Will divorce change how a Life Insurance Policy is paid out?

This question is usually addressed during divorce negotiations. Upon divorce there may be a need to change that owns the policy and who the beneficiary is there may also be an issue of how to divide any cash value of the policy. If a will sets up a trust fund for the beneficiary you will need to determine how the proceeds are paid out and make any necessary changes. If a policy has a cash value you will need to know the specifics when you are in divorce negotiations and may wish to provide for any dependents that may be the beneficiaries. You should consult with legal council if you are uncertain if your dependents will be cared for in the event of death.

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

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Tuesday, January 5, 2010

Update Jan. 06 - 2010 All About "Universal Life Insurance" By Insurance Experts

Universal Life Insurance Policy - Find Out How Universal Life Insurance Can Benefit You

By Allen Nolan

A Universal life insurance policy is a permanent insurance, which is based off of a cash value. It is almost like making an investment, the way this type of insurance works. But can it benefit you? You maybe surprised.

When you invest in something, you pay into it, usually at a fixed rate, this is the easiest way to determine your potential out come over the course of your investment period. However, every so often you might change it up, and put a little more, or a little less. This changes things up, and creates a different out come at the end of your period.

This is a lot like how universal life insurance works, you pay a fixed amount in your premiums, like in any other policy. However, in this case, if you decide to over pay, this will actually increase the cash value of the policy, thus increasing your benefit payout in the long run.

Then, on the flip side of things, if you miss a payment, or underpay, this is automatically taken off the over payments that you made, almost like as if you created a buffer zone for your payments. Who knows, you might struggle one month, and this is a good way to make ends meet something, even if it is a little indirect.

Sounds pretty good doesn't it?

Basically, it's just another way of investing, and creating a bigger portfolio of investments, except this one gets paid out when you become deceased.

This is certainly not your every day insurance policy, but it does have it's merits, where you can increase your policy size, and give a better cash pay out in the end.

That is the main benefit to having universal insurance, is the fact that you can increase it as much as you want. What could be better than that? For an insurance policy, that would be hard to do.

Another thing to remember as well is the cash value gains interest as well for the entire length of the policy, thus giving you an even greater return when it is cashed in.

So having a universal life insurance policy would be pretty good, but only if you were going to take advantage of the over payment clause. If not, then maybe you should stick with a standard term, or whole life policy instead, as they may be more suited for your life style. Why bother choosing a policy with special features like that if you aren't going to use them?

Is Universal Right For You? FREE Information!

You now know a bit about what universal life insurance is, but there's something else you need to know.

Is it the right insurance for you?

To find out more free information, click on over to compare term vs whole life insurance and universal life insurance.

A little knowledge will help you get the kind of life insurance best for you -- and for your family

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

Life Insurance - Is it Worth the Premium?

By Darrell Victor

To assess whether your life policy is worth the premium, you must understand the value of a particular policy relative to its premium. The reality is that the benefits of life insurance exceed just the life cover. Another cogent aspect of reality is that not all life insurance premiums are justifiably high or higher.

Insurers typically aim to offer more benefits, especially on cash value plans. Therefore, the question has more than one dimension. You have to relate the life cover you get against your premium but also factor in the value of additional benefits your particular policy may offer. Only then can you properly determine if life insurance is really worth it.

== Benefits of life insurance ==

The main benefit of life insurance is life cover. This may seem self-evident, but the truth is that insurers love to market the life policies in creative ways-sometimes even downplaying the significance of life coverage. They tend to emphasize the other benefits that go along with the life cover. The primary benefits of life policies may include:

i) Life coverage

ii) Double indemnity

iii) Critical illness

iv) Disability coverage and income disability coverage

v) Cash value

vi) Pension savings

Naturally, the benefit package offered varies among policies-even policies of the same type. For example, you can purchase a Universal Life insurance policy with or without critical illness. In addition, once you choose a term insurance plan, you would not have cash savings as a benefit.

== Premiums ==

Some life insurance premiums can really take a bite out of your budget, particularly for low-income earners. Term insurance is usually the cheapest form. Whole Life Insurance plans are generally the most expensive. Some insurers do not even offer Whole Life policy again, preferring to offer the more seductive Universal Life Plan. One point that many persons miss is that a high premium must be measured in terms of your budget and-most importantly-the value you receive in return.

Is life insurance worth the high premiums?

Unfortunately, there is no decisive answer. However, once you are getting commensurate value for your money, it is worth it. Sometimes, it is prudent or even necessary to have the life insurance policy. In some cases, paying a higher premium to get additional benefits can actually reduce the cost of those additional benefits. For example, some insurers offer Critical Illness coverage on permanent insurance plans. Those plans may offer similar benefits to a stand-alone Critical Illness plan but you might purchase them at a reduced rate as an optional supplementary benefit.

The major aspect of whether life insurance is worth the high premiums comes from the debate, "cash value versus term insurance." Several financial advisors opine that permanent insurance is a waste of time and that term insurance is best suited to your life insurance needs. They argue that the higher premiums of cash value plans are not worthwhile.

Many advisors agree that having life insurance is necessary for a period (a "necessary evil" in fact) but, for them, less (in terms of the premium) is more. It is true that higher premiums of cash value insurance do not always redound to your benefit. However, if you are so undisciplined that you would not save on your own, maybe you might be better off letting your insurer save for you. The higher premium of the cash value plan may actually be worth it to some persons in that regard.

Sometimes, insurers attempt to provide pseudo-benefits to justify high premiums. For example, a neat trick is to offer additional benefits (like disability coverage) but the coverage amount of the additional benefits are minimal. The client is satisfied that he is paying for additional coverage but does not realise he is not necessarily getting much more in return.

Note that nothing is worth anything if you do not need it (or don't even have a latent/future need). If a smooth insurance representative sells you insurance, but does not evaluate your needs properly, that life insurance plan may not be worth it-no matter how low your premium is.

There is also the case of insurers packing their life insurance as investment opportunities. Your insurance premium includes investment fees and charges. Therefore, you may pay higher premiums with no guarantee that the fund will perform well. In many cases, regardless of how well the fund performs, the insurer deducts those fees. Clearly, if you want life cover, you should not be paying unnecessary high premiums to get additional benefits that are not worth it.

Before you determine whether your premium is worth it, you must assess your life insurance need and choose the right type of policy from the right insurer. You should also ensure that you know how much extra you are paying for the benefits-by comparison shopping or noting what part of your premium goes to which benefit.

Darrell Victor is a freelance writer and former insurance advisor. To read his latest articles visit http://www.helium.com/user/show_articles/338815

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

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Update Sept. 01- 2010 All About "Universal Life Insurance" By Insurance Experts

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Update August 16- 2010 All About "Universal Life Insurance" By Insurance Experts

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Update July 29- 2010 All About "Universal Life Insurance" By Insurance Experts

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Update July 13- 2010 All About "Universal Life Insurance" By Insurance Experts

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Update June 23- 2010 All About "Universal Life Insurance" By Insurance Experts

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Update June 02 - 2010 All About "Universal Life Insurance" By Insurance Experts

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Update May 14 - 2010 All About "Universal Life Insurance" By Insurance Experts

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Update April 23 - 2010 All About "Universal Life Insurance" By Insurance Experts

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Update Mar. 25 - 2010 All About "Universal Life Insurance" By Insurance Experts

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Update Mar. 05 - 2010 All About "Universal Life Insurance" By Insurance Experts

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Update Feb. 12 - 2010 All About "Universal Life Insurance" By Insurance Experts

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Update Jan 23 - 2010 All About "Universal Life Insurance" By Insurance Experts

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Update Jan. 06 - 2010 All About "Universal Life Insurance" By Insurance Experts

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