Universal Life Insurance Explained
Life insurance is just as important as medical insurance. It’s worth your time to learn about the types of available life insurance. One popular type of life insurance is a Universal Life Insurance policy. These policies provide flexibility, and are a popular choice.
Universal Life Insurance (ULI) is sometimes an option for employees as parts of a benefits package. It is a life insurance policy that offers many options and benefits for policyholders. Look below for benefits associated with this type of policy.
Premiums gain interest, and the money continues to build. This provides money that can be used as present income or given to the family upon the policyholder’s death. It is income that builds on a tax-deferred basis.
Household income is unstable. It can change in a moment’s notice. That’s why it’s important to have flexible payments. Some policies have this option, and a policyholder can pay any amount between a set minimum and a maximum. This allows payments to be made according to the policyholder's cash flow and goals.
Cash surrender is a huge benefit because it enables the owner to obtain funds through their policy. This money is available at a low rate of interest or at zero net cost. The only downside is that using this money reduces the policy's benefit payout. But the money can be used for any purpose.
The portion of the policy that is not loaned is credited with the current rate of interest. The interest rate will never be less than what is guaranteed in the insurance contract.
Death Benefit Options
There are two options concerning how to receive death benefits. One option is the Level Death Benefit. This option pays the face amount of the policy. Another option is the Increasing Death Benefit. The policy pays the face amount of the policy and the policy value.
The death payout of the policy is adjusted within plan limits. This makes it possible to change the plan to meet specific needs without changing coverage.