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.
About Universal Life Insurance
Reader’s Question:
Why should I go with a Universal Life Insurance Plan? Are they better than the whole life policy that I currently have here in North Carolina?
Enrico
Charlotte, NC
Universal Life Insurance Plans are a type of whole life or permanent life insurance coverage that is geared more towards individuals who are investment-oriented and would like to have more control of how your money is invested. Universal Life Insurance policies also reflect the kind of risk tolerance that you would have when investing.
So a Universal Insurance plan can also be seen as a life insurance policy with a sort of mutual fund attached to it. The goal is to grow your money or the Cash-Value amount of your policy in the long-term (and while the policy is still in force). Admittedly, this kind of policy is not for everyone and it would be a good idea to have some basic knowledge about how investment portfolios work.
The only real difference between a traditional whole life plan and a universal life insurance plan is that you are given control over how your money grows. If you are somewhat of a risk-taker, even a conservative one and recognize that you can make money (a lot of it) by investing and also wants the capability of choosing what kind of investment mechanisms your money should be going into, then a Universal Life Insurance Plan might be for you.
This kind of policy has a lot of promise, but like anything there will always be some amount of risk involved so consult a life insurance agent or broker there in North Carolina, and ask as much questions as you feel necessary to understand this kind of coverage.
Buy Universal Life Insurance
Reader’s Question:
What are equity-indexed universal life insurance policies? My friend from California mentioned it but I’m not sure if it’s being offered in San Antonio Texas – is it?
Sarah
San Antonio, TX
Hi there Sarah! Your friend seems to know quite a bit more than the usual about life insurance policies. I’m not exactly sure where I should start. Let me begin with the basics, though.
You see, universal life insurance is a form of permanent life insurance coverage. Permanent means that your policy will remain in effect until you either fail to pay your premiums or your life insurance policy pays out. It’s a flexible fund in that you can combine a variety of investment portfolios from the standard low-risk government bonds to the more high-risk funds traded in the stock market. Now, equity-indexed universal life insurance, or EIUL, refers to a variation of the fixed universal life insurance policy which was intended to provide a more secure investment option to the usually volatile stock market mix by crediting interest to the policy’s cash values based on the rise or fall of a chosen stock market index.
I’m not entirely sure whether companies in Texas specifically offer this type of universal life insurance; hence, I suggest that you enter your zip code to the forms on this site to find out. You can also get free quotes and access to information by clicking on the links.
Instant Universal Life Insurance Quotes Online
Reader’s Question:
The internet is a very good tool for people like me who wants to search for so many topics. Lately, I came across whole life insurance and universal insurance in Pennsylvania. I have a hard time understanding the two products; please I need your good help.
Carry
Scranton, PA
It is a little bit confusing actually, if you’re not familiar with it.
Both whole life and universal life insurances in Scranton will be able to provide certainty on our death benefits. Also they are usually being paid monthly and these two insurances are both overages of permanent life insurance
For the permanent life product line the very basic among all is the whole life insurance. You are paying monthly premiums for this and part of those monthly premiums is being shell out to accumulate and become cash value which is tax free. The money that you are paying is being invested by the insurance company to other sectors and they will guarantee you with dividends. But there is a cons to this, the dividend is constant it will vary according to the economic situation. It also allows the policy holder to loan against the cash value. What’s good with this is that the premiums are constant all through out.
On the other hand the universal life insurance, mix up the term life insurance with the money market investment. This type of insurance does not give you any guarantee on the return of investment and more often the incentive goes down more often than the whole life insurance.
Carry, if you are planning to get one of these insurance products be very specific about your queries to your insurance agent . Ask about your worries and doubts, also about your expectations to the product that you are going top choose. You can also opt to do a little shopping for free life insurance quotes online using so many insurance websites like this one. Use any similar form like the one you see in this page for you to get routed to free quotes which you can compare in your area.
Free Universal Life Insurance Rate Quotes
Reader’s Question:
How can I use life insurance as future investment in Las Vegas? I really though life insurance is just for beneficiaries who are left if I die.
Marco
Las Vegas, NV
It’s true that insurance are provided to your beneficiaries when you die, but it can do more if you buy permanent life insurance. There is one type of life insurance that only the beneficiaries can benefit, which is the term life insurance. Term life insurance is purely life coverage for most life insurers in Nevada. Your life insurance should be enforced within a specific term so that when you die, your beneficiaries will receive something. But without death on the term of your life insurance, you will most probably gain nothing.
Another type of life insurance which has an investment side is known as permanent life insurance. This is definitely available in Las Vegas because this is common. It can accumulate cash every time you pay your basic premiums. Even if you decide to eventually stop paying premium at certain time, the cash will continue to accumulate. The premiums will differ in terms of the cash value that it could produce plus the death benefit it offers. Permanent life insurance will have three variations: universal life insurance, whole life insurance, and variable life insurance. Each will vary on how the cash accumulates normally due to the interest rate variable.
Permanent whole life insurance will be very useful in your future because of its cash value. You can withdraw it and use it for whatever purposes. Some would buy whole life insurance for their retirement. Others would buy the same type as a valuable emergency fund. Some would use it to meet monthly mortgages or any other long term financial obligations. Life insurance is really investment for your future. All you need to do is to choose the appropriate type in Las Vegas Nevada NV and you will be all set.
Universal Life Insurance Florida
Reader’s Question:
I have encountered a person mentioning about investing in variable life insurance. Then I have another friend who received a proposal for variable universal insurance. Are the two the same in Florida concerning life insurance?
Cheska
Gainsville, FL
I’m sure that you have also been approached by life insurance agents in Florida because your friends have been contacted too. Anyway, to answer your question, both variable life insurance and variable universal life insurance are permanent life insurance that has the life coverage and the cash value. Meaning, you are not only paying for life insurance, you are also investing for cash which accumulates over a period of time. These are the main similarities of the two life insurance products.
The variable life insurance has cash value which is invested in stocks, bonds and mutual fund for money market. This seems attractive in a sense that these investments grow quickly and in large amount. I know you’ll agree that stocks and bonds are good investment when it is performing well. However, there’s a risk that these investment may not work well thus posing risk to your money. Once the investment is a failure, you would decrease the face amount of your life insurance together with the failed investment. However, there are policies of variable life insurance that guarantees death benefit within minimum level.
Variable universal life insurance has the same characteristics as the variable life insurance. What makes it different is that it has the features of the universal life insurance in premium payment. Just like universal life insurance, the variable universal life insurance is flexible in premium payment because it is dependent on the prevailing market interest rate. Such flexibility in premium is the only difference with the variable life insurance.
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.
Permanent Life Insurance Florida
Reader’s Question:
Hi, I have bought permanent life insurance here in Cape Coral for about ten years now. But at this point I can’t pay for the premium anymore because of an unexpected event in our family. What should I do with my insurance here in Cape Coral?
Claire
Cape Coral FL
Hi there Claire.
I appreciate your honesty and surely you will be rewarded with solutions to your crisis. With permanent life insurance, you will be faced with three options if you cannot pay for the premium anymore. First, you can opt to cash out the cash value of your policy. This way, you will be able to collect the accumulated cash. Once you do this, you will not longer be entitled for the life insurance coverage but at least you have taken out the cash savings. It is possible for you to pay taxes if the amount is over what you have paid in premiums.
Your second option is reduced paid up. This means that you can choose to stop paying while you let the cash value pay for the life insurance. Once this happens though, the death benefit may be reduced and there would be no more cash value.
You can opt to have it lapsed. However, you can save it in due time if there is provision in the policy that it can be reinstated after a period, usually after five years. Once you reinstate it at times when you are already ready to keep the life insurance “alive” again, you need to pass through another medical examination. However, the premiums are usually lower compared when you buy it as new life insurance.
You can talk to your life insurance agent to guide you with the best choice taking into account all the possibilities in your current and future condition.
Universal Life Insurance in Kentucky
Reader’s Question:
I am a permanent life guy! My agent in Lexington, Kentucky was telling me about a new product called universal life insurance. If you can please fill me in fro things I should watch out with insurance in KY?
Jon
Lexington, KY
Okay Jon,
Glad to hear you are on board with permanent life in Kentucky. Universal life insurance is not a new coverage. Let’s say it is a young coverage. Universal life plans were developed to accommodate individuals who, like yourself, wanted the advantages of permanent life insurance but who wanted a little more flexibility with the premiums requirements.
Universal life insurance does offer a guaranteed death benefit. That should be at the core of your decision making if you need to purchase very soon in Lexington. But, sometimes it is nice to be able to work with the carrier to establish your own premium payment amount and how those payments are made. Many universal life insurance packages include dual death benefit possibilities. See what we mean by flexibility of insurance policy in KY?
With universal life insurance, the owner can also decide the coverage period. It can be for one’s entire life or for a lesser time frame. Just another flexible option for you to consider. Usually the cash value accrual in universal life insurance is not guaranteed, but the option is there for you. Sounds like your agent in Lexington, Kentucky knows your investment history. Get more info from him and please consider universal life insurance.
Universal Life Insurance in Tennessee
Reader’s Question:
I understand that universal life insurance would be relatively an expensive type of insurance in Memphis, TN. Would there exist a cheap universal life insurance considering that it has a flexible premium? With flexible payment, it means the premium fluctuates so it can be considered neither cheap nor expensive.
Tanya
Memphis, TN
Good question, Tanya
It’s an interesting question because you argue that having a flexible rate, the price cannot be determined if it is high or low compared to others type of life insurance. That seemed to be a wise observation.
To answer your question, universal life insurance is actually more expensive than the term life insurance. But when you compare it to other types of permanent life insurance that’s available in Memphis TN, we cannot conclude that it is cheaper than others just because it is simply flexible. Although the premium is flexible, the flexibility is only based on the foregoing interest rate in the investment side.
But universal life insurance is not just investment, it also has insurance. When you are unhealthy, for instance, the price of the insurance is higher. The combination of high life insurance and investment makes up an expensive premium. Meaning, there is still a required premium to pay to keep the universal life insurance in force. It is not purely flexible to the sense of your capability to pay. Another advantage of universal life insurance is you can borrow the accumulated amount to pay the premiums at the right time and amount. This way it is not hard for you to pay.
If you are simply concerned of the flexibility side, it is not about your capability to pay per se. It is about the interest rate to accumulate the tax-deferred investment side of the universal life insurance. Other than this, you can still find options to pay cheaper premiums for universal life insurance. In conclusion, universal life insurance is not cheap when compared to other life insurance available in Memphis Tennessee because this has investment side. It is flexible only on the investment side but you are still obliged to pay the life insurance side which actually has fixed base premium to pay.
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