Benefits of Universal Life Insurance

If you are looking for a great life insurance option that will provide you the coverage you need while still being flexible, you owe it to yourself to consider universal life insurance. Essentially this is a type of permanent insurance that will provide for your family after your death. However, it also can accumulate cash value as well. This type of life insurance offers you more control, more flexibility and great investment value as well.

Many people find that they get everything they need from their universal life insurance plan. Sure, term life insurance is another option out there but it cannot provide many of the benefits that universal life insurance can. Not sure that this type of insurance is right for you? Well, let’s take a close look at some of the main benefits that are offered with this type of life insurance.

Universal Life Insurance Offers Flexible Premiums

One of the main benefits that you will enjoy with universal life insurance is flexible premiums. You can actually choose the frequency of your payments as well as the amount that you pay. As you plan for your future, you can increase your premiums or even make contributions in lump sums as well. So, for those looking for flexible premiums from their life insurance, this is a great option.

Death Benefits are Tax Free

When you choose to go with this type of life insurance instead of term life insurance you’ll find that the death benefits are tax free. This is another great benefit. The beneficiary that gets the proceeds of this type of life insurance will not have to pay taxes on the money. This is a great option that will help you make sure that part of your life insurance does not go to the government. If you want to save your family from paying hefty taxes then consider this type of life insurance.

Flexible Protection

Flexible protection is another of the many benefits that you can enjoy with universal life insurance. With this type of life insurance protection, you can choose the level of protection that will be best for your family. As your needs change, you have the ability to either decrease or increase your coverage as well. If you need a life insurance plan that offers flexibility, this is the type of insurance you need.

One way in which universal life differs from adjustable life is that the policyowner has the flexibility to increase the amount of premium going into the policy and to later decrease it again. In fact, the policyowner may even skip paying a premium and the policy will not lapse as long as there is sufficient cash value at the time to compensate for the nonpayment of premium.

You’re Guaranteed Your Return

With most universal life insurance policies you’ll find that you have a minimum interest rate that is guaranteed. This means that even if the insurance company has some bad investments, you’ll still get a minimum return on the cash that is guaranteed. However, if the insurance company you are with does great with their investments, your interest on the cash part of your plan will actually increase. So, if the economy turns bad, you will still do good and, if the economy does well, then you will do even better.

Ability to Borrow Against Your Policy

One benefit that many people enjoy is the ability to borrow against your policy. Of course there are certain limits to this but it can be quite helpful if you need a loan for any reason such as an emergency. Over time your policy builds up quite a substantial amount of money which gives you quite a bit to borrow against if you need to.

Tips for Purchasing Universal Life Insurance

Now that you understand some of the benefits that can be enjoyed with this type of life insurance, you may be wondering how you go about purchasing it. Here are a few tips that will help you out when you are making your life insurance purchase.

Tip #1 – Determine How Much Insurance You Need – The first thing you need to do is make sure that you decide on how much life insurance you are going to need. Different people have different needs and you may not need as much insurance as someone else. You’ll need to consider your debt (such as mortgage payments) and the needs of your family before you can decide on the right amount for you. No doubt, you want to be sure that your family is protected if something happens to you, so you’ll want a life insurance policy that is large enough. A good rule of thumb is to pad your plan with an additional 10% more than you actually think you need (file this under "Better to be safe than sorry.")

Tip #2 – Choose a Qualified and Experienced Company – Of course you’ll also want to choose a qualified and experienced company to purchase your universal life insurance policy from as well. Be sure that the company you choose has great ratings from Standard & Poors and other rating services as well. You may even want to take some time to personally check into the company’s reputation to make sure you’ll be safe in their hands.

Tip #3 – Pay Attention to Investment Goals – Last of all, it is important that you take a look at investment goals of the funds that are available. You’ll also want to take a close look at any management fees that you may have to pay as well. This way you can choose the funds that work the best for you.

For those who want control over their life insurance needs, universal life insurance has much to offer. You’ll enjoy benefits like flexible premiums, tax free death benefits, protection that is flexible, a guaranteed return and even the ability to borrow against your money. With all the excellent benefits before you, why not go ahead and consider going with this type of life insurance to make sure your family is protected. You never know when something can happen, so be sure to work on getting your policy today.

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