Tips for The Average Joe

What Makes Universal Life Insurance Policies Stand Out from Other Life Insurance Policies

Universal life insurance takes care of your beneficiaries financially when you die.

The variable universal life insurance enables you to invest your cash value in bonds, money market mutual funds and stocks. These overall investment accounts of the company and also tied to bonds which makes it safe for you to take the universal life insurance. You are guaranteed a fixed interest rate that does not change with the changes in the market. There are various indexes for you to choose such as tax-deferred cash value for your retirement plan in the life insurance. You benefit with the high interest on the cash value if the index futures performs well. You do not invest the cash value directly into the stock market, therefore, it is less risky than the variable universal life insurance.

The price of universal life insurance is lower than whole life insurance. Decision-making by the policyholder of universal insurance is less intensive than a whole life insurance policyholder.

The payment options are flexible for the universal life insurance policyholder. Fixed premiums are payable at a fixed and regular schedule for a whole life insurance policyholder. You have to pay the same amount at a specific date each month. You decide the time and amount you will pay if you take a universal insurance policy. You can decide to increase your cash value amount paying more premiums. You are allowed to pay premiums using the cash value provided that it exceeds a specific amount. If you have variable incomes you can pay premiums in bulk when you have enough money so that you do not pay for a few more months to come.

The amount you will get us death benefit in the whole life insurance is guaranteed, and you cannot change it. The policy allows you to lower your death benefits anytime you want so that it fits your financial needs. You do not plan for your income to reduce, but circumstances of life can force the situation to happen to you. You are allowed to adjust to all circumstances of life as your cash value continues to grow with the universal life insurance policy’s flexibility. Increasing your will benefit the beneficiaries more because they’ll have more money to support them after your death.

You do not need to qualify for a credit if you’re borrowing against your life insurance policy. The can you borrow against universal life insurance policy has a lower interest rate that banks and does not attract income tax. You do not need to pay the loan because your cash value will be used to repay the loan if you default. Universal life insurance allows you to with no part of the cash value without surrendering the policy. You are not charged tax for withdrawing a portion of your cash value from the universal life insurance.

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