If you are looking for financial protection for your loved ones, consider taking up universal life cover. This type of policy provides access to tax-deferred cash values, and there are two types to choose from; fixed or flexible. However, before you start looking for universal life insurance quotes, you should review this article to know more about its advantages.
The fixed premium cover offers adequate protection but the provisions of this policy cannot be altered once coverage is granted. On the other hand, the flexible type of cover means the protection level is changeable and you can control the amount of payments frequency, as long as they are within bounds. This policy offers maximum protection for your family in the event of your untimely death.
Fixed premium policies stay the same amount every month until the death benefit is reached. However, every policy is written differently by insurers so it is best you do your research first. This type of policy is considered high risk due to the fact that it needs a certain amount of interest from the paid premiums.
During the high interest periods, the policy may face problems. You may still need to pay more to have the same amount of benefit upon your death. With lower risks and a better choice for the level of death benefit, it is better to opt for the flexible cover. This type of policy is ideal for younger people or those who want to keep an eye on their insurance accounts.
A flexible policy allows you to adjust to your changing needs. The cash amount earns regular interest which is based on the financial indices. As this growth is tax-deferred, it means you can have access to the cash value at any time.
Bear in mind that as you go through life changes, such as change of job, marriage, or saving towards collage fees for your kids, your policy will change too. Make sure the UL coverage is suitable for your long-term needs before making a purchase. You also need to take into account the fees and charges with regards to your gender, age, and health.
Most insurers offer two policy designs known as Guaranteed Protection and Cash Accumulation. The first one lets you select the length of the protection guarantee and so long as the premiums are paid on time, the payment schedule is not changed. The latter allows you to make changes to your premium payments and death benefit. This policy lets you meet your long-term financial goals in a tax-deferred way.
One of the many benefits to owning a UL policy is that it can be used to pay off outstanding debts. All UL policies have a cash surrender value which is the amount that is paid out to the beneficiary at the time of your death. Some people buy such policy with the idea of saving money, even though it is not meant to be for that purpose. All in all, you can choose this type of policy to protect your loved ones in the event of your death, or to pay off your mortgage.