UNIVERSAL LIFE Insurance
When you take a closer look at the financial options available to help you prepare for the end of your life, your attention may turn to universal life insurance. This is a special type of coverage that generally has a higher premium cost than comparable options, but it also has many substantial benefits that other policy options may not have. With a closer look at universal life coverage, you may decide that this is the right way to prepare financially for the end of your life.
One of the factors that sets universal life insurance apart is that it does not have a fixed expiration date. As long as you continue to pay the premium, the coverage will typically remain in effect. This is an exceptional benefit because it can lock in your rate based on your current age and health status, and this rate can remain in place potentially for the rest of your life. You also can enjoy the peace of mind that comes from knowing that your loved ones will receive your coverage benefits regardless of when you pass away.
Another important factor that you should be aware of about universal life policies is that they have a cash accrual feature. With each payment that you make, a portion of the payment will be saved in an interest-bearing account. The value of this account will increase over time, and this money is yours to use as desired. Some people will take out a loan against it, and this is a great idea because there are no loan qualifications that you must meet to obtain the financing. Other people will pull money out with no intention to repay it, such as if they are using it as part of their retirement plan.
Your universal life premium rate will be based on the death benefit amount that you select, your age and your health status. You may also increase the premium rate so that your cash account increases in value more quickly. When you set up your new policy, your representative can review the options in detail with you.