An Essential Guide To Universal Life Insurance
Readers Question:
What are the benefits of a Universal Life insurance policy? Will I have to spend much on such a plan?
Shirley
Des Moines, IA
Good question. Let’s define Universal Life insurance first: this is a special kind of Whole life or Permanent life insurance coverage that allows a policyholder more flexibility when it comes to adjusting how much you pay for premiums, and even your death benefits. It has the savings or cash value feature of a whole life insurance policy as well. The benefits of such a life insurance plan include:
1. More options when it comes to pay-outs after the maturity of the policy – you may choose to have either the cash value as the death benefit, making premiums lower, or the face value amount of the policy.
2. A Guaranteed minimum interest rate stipulated on the policy – your cash value is sure to grow at a set rate, regardless of the insurer’s financial performance.
3. Tax-deferred accumulation of wealth – There are only certain instances where state and federal taxes can apply.
4. Your money is placed in a diversified range of investments – reducing the risk of loss in case a particular investment goes south.
Similar to any type of permanent life insurance policy, when you buy universal life insurance coverage your initial premiums can be very expensive, this is because you’re building up your cash value, and like most permanent life insurance plans, premiums become cheaper in the long run.
However, it is still highly recommended that you shop around for the most competitive policies before you even decide to buy life insurance coverage. The Internet is a great place to start; with many life insurance portals and websites giving access to the latest rates and offers, making it possible to effectively identify the providers that is most affordable to you.
Do maintain a healthy lifestyle and seriously consider quitting smoking. Smoking alone and push rate up by as much as three to four times above the average. Hazardous activities or hobbies also tend to make life cover more costly; so if you intend to keep premiums affordable, then reduce your risk of dying sooner.
How to Get Cheaper Universal Life Insurance
Reader’s Question:
I currently own a 2-year old life insurance policy but I’m not satisfied with the premiums I’m paying. Can I do something to get cheaper life insurance rates?
Baron
Lafayette, IN
Yes, the good news is that there are still some effective ways to get savings on your life insurance coverage. Here are a few tips that could prove quite useful to you:
1. Make Sure You Have the Right Policy
Paying for the wrong kind of policy is an utter waste of money, but you’ll be surprised at how often this happens. If you just need coverage for a certain period of time, such as while raising a family or paying your mortgage, then go with a term life insurance plan. Want to accumulate substantial amount of money and have permanent coverage? Then a whole life insurance plan is recommended.
2. Take Advantage of “Price Breaks”
With most life insurers today, choosing a higher coverage amount (a.k.a. death benefit or face value) can actually give you lower rates. So if choosing between a $350,000 policy and a $450,000, going with the latter can actually save you money.
3. Live a Healthier Lifestyle
Taking care of your health and quitting smoking can do real wonders in keeping your rates affordable. There is no better time to start this than now.
4. Go with Annual Payment Plans
If your life insurer offers this, consider paying your coverage a year in advance. This entitles you to get discounts or lowered premiums.
5. Look for Discounts
Discounts abound, and you want to make sure to ask your insurer about those you might be eligible for. This is an almost effortless to get savings out of your life insurance bills.
6. It Wouldn’t Hurt to Shop Around
There are hundreds of life insurance companies out there and it would be a good idea to run a free quote check from insurance comparison portals (like this website) to know what is being offered. There are times when the only way to get cheaper life insurance is to switch carriers.
Life Insurance Dallas Texas, TX
Reader’s Question:
Is getting life insurance products worth the money? Why would I be needing to buy life insurance in Dallas, TX?
Drake
Dallas, TX
Hi Drake
Life insurance is important most especially if you have dependents who are depending on your income to survive in Dallas. Imagine what happens if you die and your dependents are left without sustenance. Besides its not just about their sustenance, its also about the cost of your funeral and burial. You can’t just leave your dependents to take care of those things without enough money. And how about the credits that you have, won’t the credit company go after your loved ones whom you left? This is one important consideration why you buy life insurance.
There are two options for you: term life insurance and permanent life insurance. The former type is purely life coverage. When you die, your beneficiaries will receive the death benefit within the term that the life insurance is enforced. If you don’t die within the term, you gain nothing. But at least, this type of life insurance is cheaper of the two types. And since this is popular and common, there are life insurance companies in Dallas who can give you still the lowest premium. All you have to do is get different quotes from life insurance providers in You should choose the lowest premium with your preferred face value and benefits.
If you don’t want pure life coverage, you can choose the second type which is the permanent life insurance. Variant of this type is universal life insurance, whole life insurance and variable life insurance. This type of life insurance has a cash value or others call cash savings. Meaning when you pay the premium, you are not only paying for life insurance but accumulating cash as well. In the future, you can withdraw or borrow the cash value for whatever reasons. In other words, this is life insurance plus investment.
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