UNIVERSAL LIFE Insurance
If you have finally decided that you are ready for life insurance, then you might want to consider some of the benefits of a universal policy. This is a permanent form of life insurance that provides the policyholder with quite a bit of flexibility when it comes to their premiums and total coverage. Here is a closer look at some of the reasons that a universal life insurance policy might be the ideal option for your own situation.
The Basics of a Universal Policy
Many people refer to these policies as flexible premium adjustable life insurance because the policyholder has significant control over how much they are paying every month. Instead of having a static premium like many other policies, you can either choose to pay the minimum amount to keep the policy active or invest extra money. These policies are a blend of life insurance and a long-term investment account, and this makes them a popular workplace benefit among many employers.
Building Your Policy's Value
Having cash value in your life insurance policy can be incredibly beneficial for two reasons. The first reason is that these accounts will accumulate interest. Depending on the stocks or index that your account is tied to, your life insurance will actually be making you money instead of just maintaining the death benefits. You will also be able to borrow against your policy after you retire. These loans are tax-free because they fall outside of the regulations of taxable income. For retirees, having access to tax-free cash at any time can be incredibly useful.
Is This Policy Right for Me?
While the general guidelines of universal life insurance might seem straightforward, these policies should not be thought of as forgettable contracts. Even if you pay more into the policy, the returns might not be as high as you would like. This is why it is so important to work with an experienced broker to ensure that you are making the most out of your life insurance. Policyholders will need to review and make changes to their premiums every few months depending on the state of the market.