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 Reading
Live Your Life Insurance
Teaches You Surprising and Viable Strategies
For Developing Prosperity Through
Your Life Insurance Policy
Choosing Term Or Universal Life Insurance
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.
Live Your Life Insurance
Teaches You Surprising and Viable Strategies
For Developing Prosperity Through
Your Life Insurance Policy
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