All About Universal life Insurance

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

2010-08-31T12:34:00.000-07:00

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

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

2010-08-15T08:09:00.000-07:00

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

2010-07-28T08:41:00.000-07:00

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

2010-07-12T18:53:00.000-07:00

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

2010-06-23T05:51:00.000-07:00

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

2010-06-02T07:13:00.000-07:00

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

2010-05-14T06:05:00.000-07:00

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

2010-04-23T06:42:00.000-07:00

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

2010-03-25T05:47:00.000-07:00

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

2010-03-05T05:03:00.000-08:00

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

2010-02-12T04:29:00.000-08:00

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

2010-01-24T04:42:00.000-08:00

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.

I have done some research for you and found these Life Insurance Experts can get you the very best deals on a policy that fits your individual needs.You can be insured with the best policy as early as this week! Fill out the short form and a representative will contact you with the most competitive priced plans. Click Here To Save.

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

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

2010-01-05T22:52:00.000-08:00

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

2009-12-18T03:44:00.000-08:00

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

2009-11-29T05:29:00.000-08:00

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

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Universal Life Insurance - A Flexible Life Insurance

By Vincent Funfatt Yeong

Definition

Advantages

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

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.

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

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

2009-11-12T02:10:00.000-08:00

Universal Life Insurance - Is it Suitable For You?

By David Smidev

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

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

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

2009-10-23T23:04:00.000-07:00

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

2009-10-06T05:43:00.000-07:00

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 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

My #1 site for online - insurance quotes anywhere

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

2009-08-27T05:09:00.000-07:00

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

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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Update August 08-2009 Universal Life

2009-08-08T04:40:00.000-07:00

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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Teaches You Surprising and Viable Strategies
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Interest Rates and Universal Life Insurance
By Evan C Davis

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.

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All About Universal Life Insurance By Insurance Experts

2009-08-01T00:44:00.000-07:00

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

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

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.

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All About Universal Life Insurance By Insurance Experts

2009-08-01T00:42:00.000-07:00

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

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

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

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Whole Life Insurance, Universal Life Or Variable Life?
By Scott Lunt

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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All About Universal Life Insurance By Insurance Experts

2009-08-01T00:38:00.000-07:00

There are many factors that universal life policyholder must consider when go into deciding which investment options to choose within a UL plan. Guaranteed interest accounts, for example, are less risky and indexed accounts which have a larger potential rate of return.

1. Advantage

a) Most UL plans allow the policyholder to allocate deposits in a way that matches their risk philosophy. Such a plan may change its investment allocation as the policyholder gets older, negating the need for the policyholder to monitor the UL investment mix to ensure that it is consistent with the policyholder's investment philosophy as that changes.

b) Tax-advantaged status

Investments that invest in the insurance company's general funds, have advantage of prefer tax status, no matter which outside index is linked to particle index or mutual fund account, if the actual funds is invested in the general fund of the insurance company, they will not be subject to annual taxation. If the client would like to invest outside of the company's general fund, many insurers have segregated funds attached to their UL contracts and of course, any investment return of these funds is taxable annually.

c) Depending on the type of fund, the income may benefit from tax preferred status if the growth in the fund can be attributed to capital gains or dividends.

d) The used as a carrier fund or shuttle account to automatically receive proceeds from the sheltered accounts should the plan become non-exempt and the funds must be refunded.

e) Non-sheltered investment accounts allow a policy to become paid-up early, often as quickly as with one deposit.

f) If the UL plan can be registered, a non-sheltered account becomes a sheltered account as, once registered, it forms part of the policyholder's 401k or RRSP plans.

g) Investment returns accumulated in the universal life policy is tax free because they form part of life insurance, if payable to beneficiary upon the death of life insured.

2. Disadvantage

a) Fund invest outside of the company's general fund, many insurers have segregated funds attached to their UL contracts and invest outside of the company's general fund. any investment return of these funds is taxable annually.

b) Limited choice of investments.

c) Investment return of funds withdrawn from universal life insurance policy are taxable.

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://lifeinsurancexiii.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

Characteristics of Universal Life Insurance
By Kyle J Norton

As we mentioned in the previous article, universal life (UL) was introduced in 1981-82, in response to a historically high interest environment and a consumer awareness of the value of self-directed investments because traditional insurance could not compete with short-term interest rates.
Here are some characteristics as follow
1. Account Value
The account value of a universal life plan is the sum of the gross values of all the investment accounts within the policy, including income, after deductions for the current month expenses.

2. Cash Surrender Value
The cash surrender value of a universal life plan is the current account value, less outstanding loans and surrender charges. Surrender charges are usually based upon a multiple of the minimum required premium for the policy back-end charges are larger than front-end charges.

3. Premiums & Contributions
Premiums are those amounts needed to pay the cost of insurance charges and other expenses for the policy. Deposits are those excess amounts that are of a pure investment nature.
4. Death Benefit Options
The amount of death benefit payable under a universal life policy is based upon 1 of 4 different options
a)Level death benefit: Level coverage throughout the lifetime of the policy.
b) Level death benefit plus cumulative gross premiums: Death benefit increases by the amount of each gross deposit to the policy.
c) Level death benefit, indexed: The amount of death benefit increases, yearly, by a predetermined percentage.
d) Level death benefit plus account value: The total amount of death benefit is always equal to the initial face amount, plus the gross account value. This is the most popular chose by 90% of universal life insurance policies' owners because
the gross account value is tax free.

5. Premium Flexibility
The premium deposits, plus accrued investment income, must be sufficient to pay for all expenses and deductions, so as to keep the policy in force, tax exempt life insurance contract, flexible premium.
Universal life is not for every consumer
It's flexibility tends to be reflected in much higher administration costs than are found in traditional whole life plans and the variable nature of the plan may make it unsuitable for those clients wanting guarantees

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-insurance07.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

Universal Life Insurance Quotes
By Kevin Stith

Have you ever wondered what will happen to your loved ones when you die, especially if you are the family breadwinner? This is such a big worry, particularly to those whose children are still very young and their spouse is not working. To secure your family’s future in the event of your death, it’s time that you find out about Universal Life Insurance.

Universal life insurance quotes provide information on conditions covered, insurance rates, exclusions and benefits of purchasing universal life insurance.

How can you obtain universal life insurance quotes? It is simple. All you have to do is to go online and check online insurance companies that will give you instant quotes online. You just have to fill up a form and submit it. You will get your quote in no time at all – usually within minutes. An agent assigned to online inquiries will probably give you a follow-up call as well to see if you have any further questions or to sell you a policy.

If you are not Internet savvy, you can call various insurance companies and speak to an agent. They will be happy to explain universal life insurance to you and offer quotes. Make sure you have all the details about your needs together before you speak with an agent or fill out any forms online, to make sure that the quotes you receive are tailored to your specific needs. Both online insurance companies and insurance agents will be happy to assist you in comparing quotes and they types of coverage you will be receiving.

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

Universal Life Insurance - Is it a Good Investment Strategy?
By Julie Shields

Universal Life Insurance, also called Permanent Life insurance, is the type of policy where you also hear the term, "cash value". The cash value is the difference between the amount of your premium paid, and what the insurance's actual "costs" are. The difference accrues into a cash value, and the insurance company pays interest on this cash value it accumulates. Often times, in the earlier years of the policy, your premiums heavily outweigh the insurer's "costs", so you are basically accruing "cash value" on a tax-deferred basis. Your death benefits and premiums are flexible, without having to rewrite the policy, if you decide to make changes. The cash value can be used to have your premium deducted, if you have enough value. You also hear about people borrowing against their "cash value", however, these loans will be deducted from the death benefit, it not repaid and also will become taxable.

Many people chose Universal Life or Permanent Life as part of an investment strategy, they build cash value with tax deferment, if interest rates are high-they will earn interest above the insurer's costs, and some policies are written as Variable Universal Life policies, where you can even direct investments in mutual funds and other stock and bond issues where the risk of return (or loss) may be available. You can also borrow against the cash value, in the event of an emergency, and they offer flexibility on the benefit or premium.

The advantage of Universal Life policies is the flexibility they offer. You can invest, borrow, and set premiums and benefits to fit your budget. The disadvantage is that you can lose cash value through a downturn in the basis investments, low interest rates or if the insurer's costs deplete the cash value, making the policy worth nothing. If the cash value gets depleted due to downturns in investments or the insurer's costs exceeding the cash value, the policy is expired, your premiums lost and you have no death benefit.

In contrast, Term Life Insurance is a policy that is purchased for a set death benefit amount, with set premium payments and a guaranteed payment to your beneficiaries, as long as you keep the premium payments current, no matter how the insurer's costs or investments perform. It is a much safer and guaranteed life insurance policy, if your goal is to have a benefit paid after your death, to help your loved ones with expenses. Term Life Insurance is not really part of an investment strategy, but a protective strategy. Universal Life Policies, as you can see are basically, a financial investment growth strategy, with risks involved that may or may not take care of expenses after your death. It is often called permanent, because, "it is permanent, as long as your cash value pays the premiums, or you pay the premiums, but your death benefit is not a guaranteed value, but it assumes it will be permanent as long as premiums exceeds costs, but it is NOT guaranteed your whole life". As you can see, life insurance can be confusing, but may not be the best investment strategy.

The author lives with her husband in Maryland, with their two dogs and cat. She put together the website http://www.affordable-life-insurance-guru.com in order to help the everyday person navigate the often confusing world of life insurance

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

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All About Universal Life Insurance By Insurance Experts

2009-08-01T00:35:00.000-07:00

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

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

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.

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

Universal Life Insurance
By Kevin Stith

Life is so uncertain and so many things can happen -- even the things you least expect, such as a sudden death. You could be very strong one minute and suffer from and a heart attack and die the next minute. However, one thing is for sure, the loved ones you leave behind will be devastated and be even more in distraught if they do not have the means to pay for your funeral services. That is why it is important that you secure the future of your family by getting a universal life insurance.

Universal life insurance is one type of life insurance. It is characterized by flexible premiums and adjustable benefits. As your insurance needs change, your policy can also be adjusted; however, this action requires approval. The benefits of securing a universal life insurance policy include flexibility, security, tax-deferred account value growth and tax-free death benefit.

A universal life insurance plan is flexible because you can adjust your premium payments and death benefits according to your needs. Even with your changing insurance needs, you are secure that your loved ones will not go through a financial crisis in the event of your death. Aside from these two benefits, you can also get tax-free and tax-deferred benefits. Yet, the proceeds that your beneficiaries will get are income tax-free, and the account value of your policy earns interest and is federal income tax deferred.

Getting a universal life insurance policy gives you lots of benefits. But, if you are still in doubt of these significant advantages, you should consult an insurance agent to better explain them to you. You might as well ask other important information regarding premiums, savings, reserves and payments to ensure that you get the right life insurance policy for you.

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

Whole Life Vs Universal Life Insurance
By Donald Lusan

You may find it a good idea to look at "whole life vs universal life" insurance. You probably wonder which is best for you and your family. Because more people are familiar with it let us take a look at the mechanics of whole life insurance policy first and find out once and for all which is best "whole life or universal life" insurance.

Whole Life InsuranceI have a certain fondness for the whole life insurance policy because of the myriad of benefits it provides. There is the guaranteed level death benefit that you cannot outlive. You also have a guaranteed premium when you purchase whole life insurance. Your premium never goes up. The whole life policy has a cash value as well as a dividend if the company performs well. The cash value is guaranteed and also earns a minimum amount of interest. Dividends are not guaranteed. In our comparison of whole life vs universal life we must consider that the whole life policy dividend can be used to purchase paid up additions...which are really small paid up policies purchased each year which are added to the base policy. These paid up additions increase your death benefit and also have cash values. The dividend can be paid in cash or they can be used to reduce premiums. With all these benefits when we look at whole life vs universal life we must also consider that there is a certain rigidity built into the whole life policy. That is the policy in a nutshell. It is a good policy but quite inflexible.
Universal LifeUniversal life provides a little more flexibility than the whole life policy. Life insurance buyers today tend to favor term life insurance. Universal life is built on a term base. It is basically a term policy with an added savings element. You maintain a level death benefit but you also have the option of reducing the death benefit whenever you like. You can also increase the death benefit but you may be required to provide evidence of insurability at the time you choose to make the change. The premium you pay usually remains level but you do have the option of reducing it. Here is where it is flexible. Let us suppose you bought a universal life policy and you applied 30% of your yearly premium to pay for death benefit and 70% of it to saving. You may decide 5 or 10 years down the line that you don't need as much life insurance as you now own. You can reduce your death benefit and apply the applicable cost to your savings plan. Let us suppose, on the other hand, you decide that that you need additional life insurance 5 or 10 years down the line. You can reduce the amount of premium applied to savings and use it to purchase the additional term insurance you need. That means there would be no need for any additional outlay in premiums. You must, however, bear in mind that you have to qualify for the additional insurance. The life insurance company may ask for a medical examination. Whole life vs universal life...those are the basic differences. You may add the waiver of premium rider to either policy. The cost for the rider for the universal life policy is much lower than of the whole life as the premium for the rider only applies to the portion of the premium applied to death benefit. With the whole life policy the entire premium is waived in the event of disability. You may also add the accidental death benefit rider to either policy.

For additional information on whole life vs universal life go to =>http://www.lifeinsurancehub.net/permanent-life-insurance.html

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 life insurance companies in the United States as well as Canada. His advice is invaluable.

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

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All About Universal Life Insurance By Insurance Experts

2009-08-01T00:31:00.000-07:00

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

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

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

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

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All About Universal Life Insurance By Insurance Experts

2009-08-01T00:20:00.000-07:00

Group Universal life insurance is a type of insurance policy that lets you change the amount of insurance that you need overtime based on different situations or events in your life. This insurance is generally offered by employers to employees as a way of protecting them and their families from financial loss due to a death.

The benefits of this type of policy are much more akin to a whole life insurance and offer much more than a term life insurance policy would. These policies are flexible, have tax-free benefits, and also allow you to put money into an account that is sheltered from taxes, where the money will be allowed to grow on a tax-deferred basis.

When comes to choosing a group universal life insurance policy, you might not have many options as an employee of a company. However you should still take the time to learn about the policy or policies being offered to you and figure out whether they are advantageous to your needs or ineffective.

The Universal Life Church - What it is and What it Isn't
By Matthew Maiden

As a minister in the Universal Life Church for over 25 years, I get a lot of questions about what the ULC is and how it is different from other churches so I thought I would answer some of the questions here.

Kirby Hensley was an ordained Baptist preacher who was at odds with the theology of the major religions and the way they went about ordaining people so he formed his owned religion.

Hensley believed that anyone who was sincere in their beliefs and was doing what he or she felt was right, then they were already ordained. Armed with scriptures that supported his claims, he set up a legal church to be the headquarters and began ordaining anyone that requested it.

These new ministers were now legally associated with a "real" church and now had the ability to start their own ministries and small home organizations.

Since the beginning in 1959, the ULC has ordained millions of people around the world from every denomination, culture, color, and personal creeds.

While it's true that many of these people did this for personal gains like avoiding the draft during the Vietnam era, or thinking that they could get away with not paying their taxes, the majority are very honest and operating from their hearts.

As a matter of fact, not only does the ULC condemn this activity, but it doesn't work. Members that intend to operate under a tax exempt status must go through the same procedures that any other non-profit organization would in order to qualify for the benefits.

Many people over the years thought it would just be fun to be a minister but most have found it necessary to help them start their own wedding ministry. Presiding over weddings has become the number one reason to ordain a member. Small wedding chapels have become a great source of extra income for lots of couples and having these credentials has made it possible.

The Universal Life Church has helped people from all walks of life to fulfill their dreams to start their own ministry and follow their own paths to spiritually. If you feel "called" and have a desire to "do that which is right", then you too are welcome to join this growing community.

Did you know that Johnny Carson and The Beatles are members?

If you would like to learn more about the Universal Life Church please visit: http://get-ordained.blogspot.com/ and read about some of the other celebrities who are ordained ministers in the ULC.

Matthew Maiden is the host of The ULC Radio Program and would like you to give a listen to the show.

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

What is Variable Universal Life Insurance? - An Explanation to Shed Some Light on the Topic
By Ryan Richardson

Life insurance policies have evolved a great deal over the years. There are a tremendous number of options and variables that you have to consider when trying to find the plan that is right for you and your family. I cannot tell you which type of plan is best because everyone's situation is unique and what may be great for one person may be completely wrong for someone else. The intent of this article is simply to give a brief explanation of variable universal life insurance. What it is and how it compares to some other popular types of coverage.

A variable universal life insurance policy is a form of permanent life insurance which means that it does not expire as long as you remain current on your premium payments. Unlike a term policy which will expire at the end of its specified time period. Like other forms of permanent life insurance a variable universal plan will accrue a cash value because a portion of the premium payments are invested in various funds.

With a traditional universal life plan a policyholder does not have any control over what types of investments are made. A variable universal policy provides the premium payment and death benefit flexibility of a universal life insurance policy and the investment flexibility of a variable insurance policy. With this type of plan you have the option to decide what types of investments your premium dollars go into. The face amount of the policy and the cash value can go up or down because of the investments made. Because the policy owner assumes the risk of losing money with any type of variable insurance policy these types of plans are considered securities and are regulated by the SEC and can only be sold by agents who have passed the National Association of Securities Dealers exam.

A variable universal life insurance policy combines some of the benefits of both variable and universal types of coverage. This type of policy is not for everyone though. If you don't have a certain degree of risk tolerance you may want to go with something a little bit safer. However some people enjoy having a say in how their premium payments are invested and may actually feel safer by having the ability to determine what investments are made. If you're considering this type of policy you'll definitely have to weigh the pros and cons and of course those pros and cons will be different for everyone depending on your point of view.

Whichever type of life insurance policy you decide to go with, it's always a good idea to do a little comparison shopping before committing to a particular insurance provider. There's a great deal of competition among insurance companies and a little comparison shopping may reveal an opportunity to save quite a bit of money. You can quickly and easily find companies that offer the same coverage and then choose the one that offers the best price.

For a free, no obligation life insurance quote or to get a list of top rated insurance providers in your area visit http://get-online-life-insurance-quotes.com

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

Universal Life Insurance Quote – Advantages and Disadvantages of Universal Life Insurance
By Elizabeth Newberry

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

If you’re considering obtaining a universal life insurance quote, you may be a
bit surprised to find that there are several advantages to universal life
insurance policies. First, your universal life insurance policy offers permanent
protection, unlike a term life insurance policy. Second, your universal life
insurance 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 life insurance 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 life insurance 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 universal
life insurance policy will earn cash value, nor is there guarantee that your
universal life insurance policy will be in effect when you need it if sufficient
premiums have not been paid.

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

Visit our site to buy your affordable auto insurance online, to get Ohio car insurance, or to get a health insurance Illinois.

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

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All About Universal Life Insurance By Insurance Experts

2009-08-01T00:14:00.000-07:00

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Universal Life Insurance - A Flexible Life Insurance
By Vincent Funfatt Yeong

Definition

Advantages

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

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.

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

Get a Universal Life Insurance Policy
By Frank Rodriguez

You've probably seen the commercials on television that talk about having a friend or loved one die unexpectedly. Until it happens to you, you may not give it much thought. Unfortunately, when it comes to life insurance, once your loved one passes away, it's too late to do anything. If you act now, no matter how young or old you are, you can make sure everything is taken care of when you die. Universal life insurance may be the best policy for you to purchase, depending on your financial situation.

Just like all other policies, you must pay in monthly to the policy. This is paying a premium just like any other insurance policy you have on your home or vehicles. You can get either a term or whole life insurance policy. Universal life protection is one kind of whole life insurance policy. With this kind of policy, you actually add value to your account over time.

Whole life policies allow you to borrow from the premiums you've been paying in if you have an unexpected financial set back and have nowhere else to turn for money.

It is not advisable to do this if you have any other means of procuring money when you need it the most. It's imperative that you pay this money back as quickly as possible when you have to use it.

With a Universal life policy, your insurance provider will be taking part of your monthly payments and investing them in the market. Even when the market is in decline, you'll have a set amount to expect as a return on your investment. This makes universal policies very attractive to some people.

Over time, your policy can fluctuate when related to death benefit. Make sure that you understand all of the terms of this kind of policy before purchasing one. A universal insurance policy will see your family through the storm, even after you're gone. You can get a universal life insurance quote or whole life insurance quote relatively easily online these days.

You can get a universal life insurance quote or find a whole life insurance quote easily enough by searching online. Make sure to get a number of quote for the best rate.

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

What Are the Advantages of Variable Universal Life?
By Joseph L Wilson

Variable universal life insurance is growing in popularity every year. One of the biggest reasons for this is because it is being recommended and sold more and more by financial planners. Why are these financial professionals so high on variable universal life insurance policies? Because if it's used right, this is one of the most powerful financial assets you can own.

Now, life insurance was always intended to be a bridge between your younger years when you're just starting out and first gathering assets, and your later years when you've become, hopefully, well-off and have plenty of money in the bank and amassed assets. There are also special circumstances for using life insurance such as with estate planning. But what this all comes down to is that the kind of life insurance known as "term" is the kind that the vast majority of people should have.

Around the middle of the 20th century, the life insurance industry invented a new kind of life insurance that it called whole life. The idea was for this to be a permanent policy that could build cash value--tax-sheltered cash value, too. The idea also was to keep this policy for a very long time--possibly, your "whole life". The industry was trying to cater to the public's desire to have things that last, that they own, and that give back to them. So, the whole life policy was supposed to be analogous to owning your own house in which, over time, you build equity, whereas the term policy was merely a "rental" which, when you stopped paying the rent (premiums) on it, simply expired; you don't build equity in a home you are renting.

But whole life had problems. It was very expensive compared with term, and cash value accumulation was, well, not all that. And people began to slowly realize that they could "buy term and invest the difference", instead of own whole life. This meant they could buy cheap life insurance (term), then use the money they saved as the difference in price with that and whole life, and invest in the stock/bond market and make MORE money than with whole life.

Well, this could cost the life insurance industry a lot of money--so, nearly 20 years ago, they invented a new product that allowed people to "buy term and invest the difference", but with THEM. This was Universal Life, which quickly evolved into Variable Universal Life.

Variable Universal Life is a term life insurance policy bundled together with a normal investment portfolio, which the insured can customize to their own risk tolerance and financial goals. Like other "permanent" life insurance policies, these policies can eventually build enough cash value to pay for themselves. But, while the term life premiums, the choices with investments, and the greater financial return potential are all advantages--here's most the incredible advantage of this powerful financial product: those (potentially) more powerful financial investment returns all accumulate TAX SHELTERED. Now, there may be tax consequences if and when a withdrawal is made from the policy's cash value, but there are no taxes paid on accumulation, because this is a life insurance product. Any financial professional will tell you that if you can ever grow your money tax-free, do it!

So, there you have it: buy term and invest the difference--and beat the tax man--with Variable Universal Life.

To see this article and to learn more about what's the best life insurance policy for you, visit http://www.GetBetterLifeInsurance.com

Veterans Universal Life Insurance
By Julie Shields

For our brave and dedicated military servicemen (and women), the U.S. Department of Veterans' Affairs makes sure that there is life insurance coverage for all active and retired military men, regardless of whether or not they ever saw active duty in a war, which branch of the military they were in, or how long they served (those who received court martialing or dishonorable discharge are usually a different case, however). Those who serve(d) in the Coast Guard and the Reserves are also eligible for this military group life insurance.

This group life insurance is low-cost. The Servicemembers Group Life Insurance program (SGLI) is that which is for the active duty members of the U.S. military forces. When one of these retires, he can extend this government life insurance coverage by converting the SGLI coverage to VGLI (Veterans Group Life Insurance program) which is for the retired members of the U.S. military.

VGLI is renewable term life insurance. VGLI coverage can be purchased in $10,000 increments but not to exceed $400,000 in face amount or exceed any coverage limits that the service member had with his SGLI policy. Service members need to convert to a VGLI policy within 485 days after their discharge date, or lose their eligibility for it. If they convert right away (within 120 days after their discharge date) they are guaranteed the requested VGLI coverage regardless of current health status (there is no physical or medical questioning within this time frame).

VGLI policy premiums get calculated based on the age of the service member at the time of conversion. There is no need to give proof of income or any credit score information. The spouses and dependent children of service members are also eligible to buy VGLI polices.

However, a service member can convert his VGLI term insurance policy to a private insurance company permanent policy at any time. Over 45 private companies now offer a conversion policy.

Veterans policies are fundamentally the same as the usual Universal Life Policies, but there are a couple of very important differences that are there solely for military personnel. VULI policies have lower premiums than the same face amount (assuming similar risk factors) would for non-veteran citizens. There are also less strict eligibility and issuance requirements. These qualities enable veterans who are just returning to, or starting out in, civilian life to afford quality permanent life insurance that they otherwise might not be able to afford. U.L. policies offer benefits to policy holders that term life insurance does not, such as the building of cash value. So while the long term advantages of VULI should be obvious, there are short term advantages, too. Many veterans are just finding or starting up in jobs and did not receive the greatest pay while in the military. VULI policies don't require the usual level of premiums for the face amount, and the income required to qualify for them is not as high as normal, either.

Veterans Universal policies are a great thing for military veterans. But they are also a shining statement about the goodness, in general, of providers. Insurance salesman and the industry have been ripped apart by the media for decades. Life insurance is seen as an "unnecessary" expense that just takes away from your lifestyle and could make you "insurance poor". Insurance salesmen are seen as people who disrupt dinner time and family time with rude calls or high pressure sales tactics. And it's true that some life insurance bad seed agents have definitely tarnished the industry image with their evil ways. But for the most part, life insurance salesmen and companies feel that they are truly helping people--and they truly are.

Why do they offer these lesser requirements and lower premiums for VULI policies? It's nothing more than their small way of saluting military veterans.

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

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All About Universal Life Insurance By Insurance Experts

2009-08-01T00:02:00.000-07:00

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)

2. Flexible investments
Unlike traditional plans, where the policy account value was invested in a portfolio by the insurance company's investment managers, universal life offers the policy owner the option to choose the weighting of investment within the account value from a wide range of options: from savings accounts, to guaranteed term deposits, to funds that track specific market indices and mutual fund-like investments. All universal life contracts are subject to annualized expense charges of various natures that are deducted monthly, on a pro data basis
a) Provincial or State premium taxes
b) Mortality deductions
c) Rider charges
d) Annual administration fees
e) Insurance mortality deduction Increase or decrease each year or level term rate

We provide your with information and insurance experts Pro and Con opinion about universal life. It is up to you to decide to see if it is suitable to you. It is your benefit to talk to your insurance agent before applying.

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Variable Universal Life Insurance
By Kevin Stith

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

How It Works

Universal Life Insurance Compared to Term Insurance
By Frank Rodriguez

It's always a good idea to make sure that your family will be taken care of, if anything should happen to you. If you're the bread winner, there's a good chance your wife and kids would be lost without you. Unfortunately, during these tough economic times, it's hard to get the things we need paid for, let alone anything above and beyond. What you need to realize is that you simply cannot afford to not have a life policy. There are several kinds of life insurance. Universal life or term insurance may be the best solution for you.

Universal life policies require a monthly premium be paid, from the time the policy takes effect until the time the policy pays out. Another name for this kind of policy is a flexible premium adjustable life insurance policy.

Universal life policies have been around since the 80s and came about as a more affordable means to whole life policies.

With a universal life insurance policy, you will pay in a set amount of money each month to pay your premium. The insurer will take a portion of this money and invest it. It's usually a small amount, but it guarantees you that you'll have a return on your premiums, no matter how the market behaves. Term insurance on the other hand is the most affordable policy around.

As you continue to pay in on your premiums, your policy builds up value. Many times with universal life insurance, it's best to pay a little extra in or to ask for a raise in your premiums. Paying just the minimum will not yield a very high return.

Unlike other policies, universal life policies offer two options for payment when the policy must pay because of the death of the insured. You can get a cash value option or a face value option because the actual death benefit is flexible throughout the life of the policy. Term insurance carries no value, but offers reasonably priced straight insurance.

If you are interested in universal life it's important that you understand these insurance products. If you are looking for affordability term insurance is probably more appropriate for you.

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

The Benefits of Universal Life and Whole Life Insurance
By Frank Rodriguez

Whole Life Insurance is permanent insurance protection, as is Universal life. It provides a benefit in the event of a person's death to maintain their loved one's lifestyle. It also has living benefits through the accumulation of cash value. This makes Whole life different from term insurance.

The accumulation feature allows for net premiums paid to grow inside the policy. The net premium is derived from the total premium paid, less the cost of insurance and mortality expense. This net amount becomes available to the policy owner during the life of the policy to pay for present needs.

Mutual insurance companies, which are owned by policy owners, pay policy dividends. These dividends are applied to participating policies issued by the insurer. The dividend varies year to year and is not guaranteed. It is a return of a portion of paid premiums given to the policyholder. The dividend may be taken as cash, used to offset the premium or increase the face amount. If taken as cash it is treated as income that is subject to taxation.

The basis for the premium's calculation includes the insured individual's age, health situation and gender, among other factors. The premium itself is payable until the insured reaches age 100 at which time the policy matures. Premiums may be paid in a shorter period of time although endowment still occurs at 100. The shorter the premium payment period, the greater the annual premium. This is where the use of dividends, when declared, provides valuable assistance in reducing out of pocket cost.

When compared to the cost of term insurance, whole life and universal life costs 10 times more. This pricing difference should be viewed by considering the fact that whole life has cash accumulation where term does not. Term insurance is temporary coverage that provides benefits for the term period, usually up to 30 years. When the term period has been reached, no more coverage exists. Term is priced based on the pure cost of protection purchased and is considerably less than whole life.

Whole life and universal life use non-forfeiture values as a way to derive value or maintain protection. If a person were unable to continue paying for the insurance for a brief period, the policy may access the cash value to pay premiums. This is known as the automatic premium loan feature, which is standard. The policy may also allow a surrender of the accumulated cash value to the policy owner if necessary. The coverage may be extended for a term of years or reduced in face amount on a fully-paid basis as well.

Endowment occurs at age 100, which is the maturity date for the insurance. This means that if death has not occurred by that point, the policy owner receives the full benefit amount. This is accomplished through the investment of net premiums plus interest earnings over the period. At age 100, this amount equals the face amount.

Whole life insurance and universal life is a valued component of most everyone's insurance portfolio. A comparison of costs as well as complete analysis of needs will help determine the appropriateness of purchasing this insurance. Sitting down with a licensed professional or using any of the online needs based tools is a good place to start.

You can find life quotes for universal life rather easily via the internet. However, make sure you completely understand permanent insurance products like whole life, before committing.

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

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