Opting for a life insurance plan is not as easy as it sounds. You have to learn more about the kinds of plans on offer in addition to a truckload of other aspects. Universal life insurance is one of the most popular insurance packages out there. Universal life is quite similar to whole life insurance packages as it takes care of both lifelong insurance protection and also keeps the cash value aspect alive. Under this plan, premiums are usually allocated for a specific investment fund that is controlled and managed by the insurance agency or financial institution in question. The account only witnesses the deduction of term insurance policy costs and administrative costs of insurers each month without fail. Contrary to perceptions, life insurance rates are not sky high for these plans.
Rates of return on the accurate cash value of the insurance plan are often directly linked to the long term portfolio of the insurer in terms of investments. Life insurance rates may be lowered in several situations in these cases when current market interest rates go up, the policy cash value denomination will rise sizeably as well and as a result, policy holders may well be able to skip some premium payments or lower them as much as possible. However, there is a flip side to this as well. If the same rates of interest are seen to go down more than anticipated, the premium amounts may well increase in turn. However, flexibility is definitely more in case of universal life insurance plans as compared to whole life or term life plans.
Additionally, no matter what the life insurance rates, one can draw loans from financial institutions based on the total cash value of one’s own life insurance policy at a particular point of time. However, any interest or outstanding loans contrive to bring down overall death benefits in certain cases. In what is another advantage, universal life insurance plans give you the scope to vary your premium amounts and payment times apart from the coverage amount. Tax benefits are available on all earnings from investments made by the insurer on your behalf and there are no taxes on death benefits as well.
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