Universal life insurance is a flexible, permanent life insurance that is most common in the United States of America.
It offers cheaper protection as well as savings that are invested in order to provide a valuable build up of cash. The flexibility of this insurance coverage comes to benefit the policyholder by offering the option of change such as saving elements, premiums and the death benefit whenever circumstances change.
This coverage is better than the whole life insurance coverage as it permits the policyholder to use the interest that builds up from the savings to help in paying for the premium.
This is a very strategic and convenient coverage with both pros and cons. Some of the pros are as stated below:
- Flexible premiums depending on an individual’s preference and also options to suit the needs
- Guaranteed protection- these go on until the occurrence of death as long as the premiums are being paid.
- No-lapse guarantee- this solves any problems that could be as a result of market changes and also minimum funding.
- Death benefits options- it offers two death benefits for at least two deaths in terms of cash value.
- Tax-deferred cash build-up- the accumulating interests are completely tax deferred. It is also protected from creditors.
Wherever there is something good about a good or service, there is also a bad side of it. These disadvantages include:
- It is problematic because most of the policy owners do not understand the terms and conditions that come with it.
- It needs to be monitored annually by the policy owner so that the market fluctuations, as well as the interest rates, are kept stable.
- There are high surrender charges for any individual who Is ready to pull out. These charges are based on the percentage of the cash value that is available.
- The minimum funded life insurance coverages are considered ticking time bombs since the interest rates can become so small that it would cost a lot to stabilize.
- This coverage can be overpriced especially for short term and renewable terms. This coverage can be more expensive as compared to those that could last you up to 20- 30 years.
Whole life insurance is a type of life insurance that is a guaranteed benefit paid up on the occurrence of the death of the insured.
In addition, this insurance coverage offers the ability to increase the value of the policy at hand or even increase the death benefits for your beneficiaries.
This can only be achieved if the owner of the insurance policy is still alive and cannot be changed upon his death. This insurance can also be referred to as the straight life insurance.
Universal life insurance calculator estimates which insurance policy works well for you. It determines if the term life coverage or the whole life coverage is better for you.
It is important that you consider using the calculator before buying universal life insurance. The calculator is often accurate and will help you out a great deal.
Indexed universal life insurance is quite similar to the universal life insurance, but has a few hitches connected to it.
This type of life insurance offers the policyholder the chance to allocate different monetary value to a fixed account or even an equity index account. This coverage has various indexes you could choose from for instance the Nasdaq 100 as well as the S&P 500.
This coverage gives the policyholder the chance to decide what percentage of their funds they would like to allocate to the fixed as well as the indexed portions.
It is important to establish which insurance coverage you need before jumping into conclusion on your own. When you compare between the term life insurance versus universal life insurance you need to be well informed.
To begin with universal life insurance policies are more costly than the term life insurance. On the other hand, the term life insurance policies increase as time goes by.
In addition, the term life insurance needs you to keep renewing it. The best way to determine the best coverage for you is by using the life insurance calculator.
The Universal life insurance companies are several and you can easily access them online just as well as you can access them physically. They are determined to get you the best policy to suit your needs.
However, you need to ensure that you choose the right one at the right time to ensure that it works for you. The list of universal life insurance companies is endless and they’re different depending on your location.
Variable universal life insurance is the combination of life insurance as well as the chance to invest in one of the products.
This insurance policy is flexible and the consumer can make amends to it when the need arises. However, you need to be careful as you make the changes as they could alter the entire coverage amount.
All the same, this insurance coverage is better than the term and universal coverage since it offers stock and bonds and hence a higher rate of return as compared to the universal or the term life insurance coverage.