Universal life insurance

Term life and whole life insurance are the most recommended and common types of policy, you might have them in mind when think of buying life insurance. You should consider the mix of these two policies before you start looking for life insurance quotes, this is universal life insurance.

Universal life insurance definition

Universal life insurance or universal life is a type of permanent life insurance that has additional features and advantages; it accumulates cash value through investment of the premium payments, it is similar in some ways and was developed from whole life insurance.

One of the different but attractive features of this policy is the flexibility of premium payments, the policyholder can decide how much premium he wants to pay. Another option is that the policyholder also can decide how much premium will be used for the insurance benefits and how much for investment.

With these flexibilities the policyholder can increase the investment and decrease the death benefits when the market is good and vice versa. If things go well, he can increase the investment part of the policy if the market is good, so that he can gain more profit, or if he has financial difficulties, he can use the accumulated cash value to pay for his premium. As a result, the buyer benefits protection and at the mean time can have his premium invested in the market.

Advantages of universal life insurance

Flexible protection - it provides the buyer the flexibility to choose the amount of protection he wants, and allows him to increase or decrease the coverage, but increased coverage may subject to underwritten requirements.

Flexibility of premiums - it offers the buyer the flexibility to pay either lesser or more premium depending on the circumstances.

Guaranteed return of money - if the insurance company made profit on investments, the interest return of the cash value will increase, but no matter how bad the investments were, the buyer is guaranteed a certain minimal return on the cash portion.

Tax free death benefits - life insurance proceeds are generally income tax free to the beneficiary in most of the countries.

Universal life insurance also has its disadvantages, such as fewer guarantees than whole life insurance, no investment flexibility; the growth in cash value of the policy is limited.

Buyers are advised to check out the investment made by the insurance company and the premium payments before buying, it is said that this policy is illegally sold as investment.

Life insurance is a complicated industry, especially if the product has some involvements in investments, therefore it is advisable not to commit blindly, find out more or seek advice and information from reliable sources, make your money return, invest sensibly, please log on to different types of life insurance or universal life insurance or visit us at http://www.indianapolislifeinsurance.net/index.html

Vincent Yeong was working as architectural draughtsman, now a music teacher. Hobbies - play guitar, saxophone, piano, reading, sports, travel.

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