Making Universal Life Insurance Cheaper and Safer
Permanent life insurance is divided into two families: whole and universal insurance. Each type presents a unique problem, and navigating your way to good coverage can be like sailing between Scylla and Charybdis. Rather than brave the hazards of whole and universal life insurance, though, you might consider no lapse guaranteed benefit universal life insurance, in most cases a safer, cheaper solution.
It comes by several names: no lapse guaranteed universal, no-lapse guaranteed benefit, or NLG universal life insurance. It's technically a universal insurance product, but the no-lapse clause makes it behave like a hybrid of whole and universal, trimming off the bells and whistles of each to make a safer, cheaper product.
--Cheaper than whole insurance--
Whole life insurance is like six-headed Scylla because it takes a certain, predictable bite out of your assets. It is expensive, but your premiums are fixed for as long as you hold the policy. You may have come across warnings against whole life insurance (or even all permanent life insurance) saying that it's too expensive.
Indeed, whole life is not the right product for most insurance needs, chiefly because of its price. Why is it so expensive? Your whole life policy has equity and builds interest at a fixed, guaranteed rate. That means that you can cash it in at any time instead of waiting for the death benefit. Guaranteeing a fixed rate of growth for a year is not such a big deal but if there's a chance that interest will compound for sixty years or more, then you can imagine how expensive such a policy must be.
No lapse guaranteed benefit life insurance does away with whole life's expensive guarantee. If you have no interest in building equity for an emergency, then NLG universal is a smart, cheap move.
--Safer than universal insurance--
Universal insurance, like the whirlpool Charybdis, frightens many an adventurer because of the potentiality of losing your coverage entirely. That's because you don't pay premiums on any sort of required schedule. You pay premiums (whenever you want, in whatever amount you want) into your policy's "cash value" (its equity), and your policy feeds off of that equity at regular intervals.
So far it seems pretty simple, but the danger is in the fluctuability of your cash value. Your cash value builds interest, but the rate of interest can change at any time. Furthermore, the periodic charges which the insurer extracts from your cash value depend on the amount of cash value you have. It's not possible, then, to predict in advance just how much cash value you'll have at any time. To ensure that your policy does not run out of money and dissolve, you must keep a watchful eye on it.
Many people are well capable of managing such flucutable finances as this, but if you're one of the set-and-forget types, then no lapse guaranteed benefit life insurance is a far safer product. NLG universal insurance cuts out the cash value component of your policy and gives you a fixed payment schedule, just as if you were buying ordinary term or whole life insurance. This means that the only proceeds your policy will ever afford you are a death benefit--you can't just cash it in as you might do with an ordinary permanent policy.
More information on
no-lapse guaranteed benefit universal life insurance is available at www.wholesaleinsurance.net
Article Source: ArticlesBase.com
