Universal life insurance is a type of cash value life insurance, meaning that part of your monthly payment goes towards the life insurance cost and the other part goes into a cash account or cash value. Universal life insurance is used for a person’s loss of income, paying off a mortgage, educational costs, access to the cash value, estate needs, providing for a special needs child, or for business planning. Here are the benefits of universal life insurance.
- Policy is Adjustable
- Cash Value Builds
- Cash Value Could Pay Your Premiums
- Options for Death Benefit
- Insurance for Life
With other life insurance plans, the premiums remain the same no matter how much coverage you need at the time. With universal life insurance, you can adjust your monthly payments depending on how much coverage you need. So if your child is in college you can pay higher premiums so they could get through college if you were to die. Once they are out of college you can pay lower premiums since you no longer need to pay those expenses.
A universal life insurance cash value builds differently than a whole life policy. The interest rate is set at a minimum in your contract. If the life insurance company’s portfolio outperforms the minimum interest rate, the extra earnings may be applied to a cash value.
If you get yourself into a hard financial situation and aren’t able to pay your premiums, your cash value could be large enough to pay your premiums for you. Make sure you have enough in your cash value before stopping payments.
You have two options when it comes to your death benefit. You can get the fixed amount or an increasing death benefit equal to the face value of your policy, plus your cash value amount.
Universal life insurance is great for those who want to be covered for their entire lifetime. With term life insurance, you are likely to have to buy another policy later. The flexible premium costs allow you to have coverage all the time for the price you can afford.
At LifePlan Financial, we pride ourselves on our quality work, our honesty to our clients, and the reliability we provide. Getting insurance doesn’t have to be a hassle when you use LifePlan Financial. Contact us today for any questions or get an instant term life insurance quote to get started.