Universal Life Insurance in Tennessee

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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.