Life Insurance – Advantages Of Universal Life Insurance
Are you together with your partner contemplating of acquiring a life insurance? Do you want to be sure your family is safeguarded in case you get into an accident? Like most parents, we all want the best for our family in times of a crisis. That is why buying life insurance is extremely important for yourself and your family. Buy life insurance to ensure that your family members will not be stuck with your debts after you die. There are a lot of different types of life insurance plans on the market to help you accomplish this. Nonetheless, one of the most popular permanent life insurance plans being sold is universal life insurance. But, before you buy into this complex financial product, make sure you understand how it works. Universal life insurance offers you a combination of term life and whole life insurance.
A Universal Life Insurance policy is a flexible premium flexible benefit life insurance plan that accumulates cash value. You can change the premium amount, usually after the first two year minimums are met, and change the death benefit as your needs change. This policy is the most flexible policy in most insurance portfolios. As with all life policies the main purpose for getting this policy is for death benefit. Listed below are some of the benefits of universal life insurance policy.
The first benefit of a universal life insurance coverage is that it can accrue interest over time, based on the sum of money that is placed in the policy. The plan is based on a cash value, one that is added to each time a premium payment is made for month. Over time, the value of the policy can increase significantly, and made be tied to a number of different factors for this increase, including a stock, bond or an interest rate index – whatever the insurance company specifies in the policy. If no payment is made to the policy, the costs of insurance itself as well as any other charges associated to the account are withdrawn.
The second benefit of universal life insurance plan is that it gives flexible protection and premiums. Flexible protection is a universal life products give you the flexibility to choose the amount of protection that best suits your family or business. It allows you to increase or decrease coverage as insurance needs change. Increased coverage might be subject to underwriting requirements. Next is the flexible payment terms of premiums – you regulate the sum and frequency of payments. Looking towards the future you have the option to increase the premium or perhaps make lump sum contributions, subject to limits as specified in the policy. The extra dollars grow tax-deferred, and might increase the death and cash benefit values.
The third benefit of universal life insurance policy is tax free death benefits. Life insurance proceeds are usually income tax free to the beneficiary in majority of the countries. If you are somewhat convinced but still puzzled it would be best for you to consult with a life insurance agent in your area.