A Universal life insurance policy is a type of permanent insurance, which is based off of a cash value. It is almost like making an investment, the way this type of insurance works. But can it be a benefit to you and your family? You might be surprised.
A Little About Investing
When you invest in anything, you pay into it, usually at a fixed percentage. Why fixed? Because it’s the simpleist way to establish your prospective out come over the course of time. However, every so often you might change it up, and put a little more, or perhaps a little less. This changes things up, and generates a different out come at the end of your period.
This above example is a lot like how universal life insurance operates; you pay a fixed amount in your premiums, like in any other policy. However, in this case, if you decide to over pay, it will actually increase the cash value of the policy, which increases your benefit payout in the long run.
Now, on the flip side of things. If for some reason you miss a payment, or underpay, this is automatically taken off any over payments that you made. It’s almost like you created a buffer zone for your payments. Who knows, you might hit a rough spot, and it’s a good way to make ends meet, while still keeping your policy intact.
How does it sound so far?
What a Universal Policy Is
Basically, a universal policy is just a different means of investing, and creating a bigger portfolio of investments. The biggest difference is that this investment doesn’t pay until you die.
It’s certainly not your every day insurance policy, to be sure, but it does have its benefits, where you can enlarge your policy size, and give a better investment payout in the end.
That is the main benefit for having universal insurance, the fact that you can increase the eventual payout as much as you want. You have to admit, it’s definitely a way to get more insurance as time goes on, without re-writing the policy.
Another thing to remember as well, is that the cash value additionally gains interest for the entire length of the policy. This gives you an even greater return when it is finally cashed in.
Is Universal Life Right for You?
So having a universal life insurance policy would be pretty good, but only if you were going to take advantage of the over payment clause.
If not, then maybe you should stick with a typical whole life or term policy instead, as either one might be more suited for your life style.
Don’t choose an insurance policy with special options that you won’t use; it’s a waste of the investment. Instead, use that investment to get the life insurance that suits you best.
Want More FREE Information on the Kinds of Life Insurance Available?
Maybe a universal policy isn’t exactly what you need? Here’s totally free information on term vs whole life insurance for you.
categories: universal life insurance,whole life insurance,life insurance
Tags: life insurance, universal life insurance, whole life insurance