Universal Life Insurance

Universal Life Protection

If you are looking for a life insurance policy that also can serve as an investment, then universal life insurance may be the policy for you. A universal life policy gives one the possibility of accruing and having access to a tax-deferred cash account that, over time, can gain value. When an individual obtains this kind of a policy, the premiums he or she pays that are above the base level cost of the insurance are added to the cash value of the policy and, importantly, this account also accrues interest.

As an excellent addition to any financial plan, a universal life policy allows the policyholder to have protection of assets and to also get returned a minimum rate of return that is guaranteed. Many policies grant the policyholder the choice of withdrawing funds from the current cash value of the contract. These flexible policies are excellent for many reasons, including the provision of replacement income for the surviving loved ones of the policyholder. This kind of a policy can also provide for the sometimes frighteningly expensive end-of-life costs like a funeral and any unpaid hospital bills.

To emphasize: When an individual purchases a universal life policy, the cash value that is over the cost to insure is what gets invested on his or her behalf. The interest earned on this cash value is determined by the insurance company and is mostly based on the market rate of return and, of course, the contract specification of minimum guaranteed return. Also, as long there is a cash value that is above the cost of the policy, the insurance will always be in effect. Quite helpfully, premium payments can be also made within a range of minimum and maximum amounts depending on the contract language and the desire of the policyholder.

On the market these days are a few different kinds of universal life policies that are available. One is called a “fixed premium universal life policy” and it, like other types, provides a cash value, but once in effect the contract terms cannot be altered. A “flexible universal life policy” provides the “flexibility” to change premiums and elect new or different beneficiaries. Another type of policy is called a “guaranteed universal life” police. This kind of life insurance gives a secondary guarantee if the policyholder makes his or her minimum premium payments for a certain pre-determined period. Once meeting these conditions, the policyholder is promised a policy in force even if the cash value were to fall to nil.

If all the aforementioned benefits, like flexible premium payment schedules, earned interest and the tax-deferred status of the value accumulated in these policies seems attractive, then give one of our professionals a call today.