Universal Life Insurance
Reader’s Question:
Since I am planning to buy my own life insurance, I’d like to ask what are the benefits of getting a universal life insurance policy?
Lovely
Hillsboro, OR
A universal life policy can be atoned to a fusion between a term life and a tax-deferred interest accruing savings account.
In buying one, a benefit that you will get is that you not only accumulate tax deferred savings, but you also may not have to pay premiums throughout the entire duration of the policy. If the money required to pay for the death benefit and other associated costs accrues in the savings fraction of the policy, premiums eventually may not be needed to keep the policy in effect.
Most people who would benefit from universal life insurance policy are those who need life insurance into their 70’s as it is an investment medium as well as a life insurance policy. This would give enough time for your savings part to accumulate into an investment. Most individuals will not want their life insurance to come too late in their lives. In that case, it might be more favorable to acquire a term life insurance policy and prepare a suitable retirement investment savings account such as an annuity.
If you feel like universal life is the right insurance for you, you might want to consider a few points. First, ensure that you plan to have the policy for a long period of time given that you will need to have the policy in effect for at least fifteen years to qualify for any return from the policy and second, make sure you have a well-informed insurance agent in your area who can help you review your other alternatives such as whole life and term insurance.
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