Life insurance Universal Life Insurance

Young Shu

New member
universal life insurance
Universal life insurance is a kind of cash-value life insurance sold mainly in the United States, with the aim being to provide temporary protection to family members at a time of great need. Under the terms of this policy, the amount of premium paid over the term of the insurance is held by the insurer, who also credits the surplus of premium payment above the cost of insurance to the cash value of this policy, which is regularly credited on a monthly basis with interest. The cash value builds up in a special account, which serves as a reserve for the benefit of the beneficiary(ies). If a death occurs during the period when the cash-value has not yet been credited, then the premium which would have been paid would be returned to the insurer, and thus the life assurance would be forfeited.

Universal life insurance differs from traditional whole life in that it provides a level of flexibility to policyholders. The insurer may either require a lump-sum payment or allow policyholders to borrow against their cash values. While whole life requires constant premium payment, universal life insurance allows policyholders to change the rate of interest and payment dates, at any given time. It also allows them to convert their accounts to different payment dates, including some of their most desirable, tax-deferred periods such as retirement payouts.

Flexible premiums are a feature of universal life coverage. The amount of premiums paid and the manner in which these are paid vary with the type of policy and the insurer. A traditional whole and term life insurance policy allows policyholders to take advantage of both kinds of coverage, and premiums are set according to the expected earnings and age at the time of payment. The flexibility in this case may be the main advantage over the other. However, as universal life insurance policies are to be paid according to the cash values accumulated and not according to premiums paid, they are often less expensive.​

In Indexed Universal Life Insurance You Get the Right Policy For Your Future​

If you are considering purchasing universal life policies, but are unsure if you should get them or not, you should review index universal life insurance rate quotes first. Generally speaking, whole life indexed universal life insurance rates give you a better return on investment than either term life policies or low-cost index mutual funds. Whole life policies pay out a cash value that accumulates tax-free in your account until you withdraw it. The amount you invest in the policy is completely up to you. Unlike term life policies and low-cost index mutual funds, cash values invested in whole life policies grow tax-free on a tax deferred basis.

When comparing whole and term policies side-by-side, it's important to take note of the potential cash value accumulation aspect. Universal policies generally allow for unlimited death benefits, and thus, potential cash value accumulation is unlimited. Term life policies only allow for the minimum death benefit to be paid out upon your death, whereas whole policies allow for unlimited potential cash value accumulation. Thus, it's important to weigh the difference between the two. The wrong policy can have a very significant financial impact on your family's financial needs after your death; taking the time to get the right policy for your financial needs is imperative.

How Does a Universal Life Insurance Policy Work?​

A universal life insurance policy is just one which provides a death benefit when you pass away. You may borrow against it, use it for capital gains, or surrender the policy for cash to survive on in retirement. When you purchase a universal life insurance policy, you will receive a variety of benefits based on the type of plan you choose, and the age at which you sign up. However, before purchasing any type of life insurance policy, it is always wise to thoroughly research all options, compare policies and look for the best coverage and premium.
universal life insurance policy

Unlike other types of insurance policies, universal life insurance policies never terminate. With this in mind, there is usually no penalty for early termination. This means that if you decide not to purchase insurance during your lifetime, the policy does not have to terminate until you do. However, your premium payment could increase if you ever decide to sell the policy, surrender the premium, or take advantage of the policy.

All insurance companies will offer different levels of surrender fees or raises, that they will charge for early termination. Generally, these increases are deducted from the overall death benefit you receive, however, some life insurance companies may also charge their clients extra money if they decide to surrender the policy without first taking advantage of the raised charges. It is therefore important to shop around to ensure that you receive the best coverage, with the lowest premium payments and from a reputable company. Many online insurance companies will guarantee that their policies will always be valid, so you do not need to worry about whether you will be able to collect your money should you ever surrender the policy.

Options That You Have With Group Universal Life Insurance​

group universal life insurance

Group Universal Life Insurance is a product that provides all of the features of other individual policies while at a cheaper cost. This single policy provides both savings and life insurance options, which mean that your financial stability now and in the future is secure. There are many options for you to choose from and as long as you have an active bank account, you can apply from the comfort of your own home for one of these policies without the need to go through a broker.

There are two types of group universal life insurance policies that you should know about: guaranteed cash value and non-guaranteed cash value. With a guaranteed cash value policy, your investment grows tax deferred and is invested in any number of assets, making sure that it grows over time. As your investments grow, so does the amount of your money. The advantage of this policy is that if you need more money than your investments can provide, the cash you get is tax-deferred until you withdraw it. On the other hand, with non-guaranteed cash values you don't have to withdraw the money before it is consumed.

The group universal life insurance benefit is that with this type of policy you can choose between different payment plans, such as indexed annuities or level premium policies. You also have the option between a single premium payment and a premium payment that pay out on a yearly, semiannual, quarterly, or half yearly basis. The premiums can be paid monthly or annually based on your preference, as well.​
 

Mandy96

Valued Contributor
Obviously the word “universal” cap it all. To me, it simply means that this type of insurance is valid all over the world. I mean it doesn’t get to restrain its geographical limitations in the country where you bought it. I am not just sure if policy like this could actually be in Nigeria
 

Chibson

VIP Contributor
This kind of insurance is very important because it comes with a lot of benefits. It is very important that people are assured that they will have a coverage in times of uncertainties. This kind of insurance provides death benefit to the members of the family of anyone that passes away who is into this kind of insurance.
 

Wisdom01

Valued Contributor
Well this kind of insurance is still much flexible than the traditional type of life insurance ,since there are more possibility for you to change the premium payable to insurance company any given point in time incase the person is facing financial issues at any point in time too I think ,
 
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