Uniqueness in Universal Life Insurance Policy
Instead of the term life and whole life insurance policy, you should choose the universal life insurance policy because of the following benefits.
You will earn a higher return on the interest when you take variable life insurance and like any other universal life insurance policy. These overall investment accounts of the company and also tied to bonds which makes it safe for you to take the universal life insurance. There is a stable growth of your cash value regardless of the changes on the market. A fixed indexed universal life insurance (FIUL) will build your cash value on the basis of the stock market index that it is attached to. You benefit with the high interest on the cash value if the index futures performs well. You get lower premium rate then the variable universal life because there is no management of the cash value account.
Save money by buying universal life insurance instead of whole life insurance. There is more flexibility with fewer guarantees for the policyholder.
The payment options are flexible for the universal life insurance policyholder. Fixed premiums are payable at a fixed and regular schedule for a whole life insurance policyholder. The monthly payment date and the amount to be paid are specified in the whole life insurance policy. You are free to choose the amount and date of payment while under universal life insurance policy. Your cash value amount increases when you pay additional premiums but that depends on your choice. When your cash value is above a specific limit you can use it to pay the premiums. You can pay in bulk for the next few months ahead of you if you have fluctuating income levels so that the following months that you will not have money are taken care of.
You can adjust your death benefits which are not adjustable in whole life insurance. The policy allows you to lower your death benefits anytime you want so that it fits your financial needs. This happens mostly when the person’s income reduces. You will have an additional amount on your premiums to pay because you will get a higher cash value. The underwriter will have to recalculate your cash value when you choose to increase your death benefits.
There are qualifications that will be measured against if you’re taking a loan against the cash value of universal life insurance. You get the advantage of not paying income tax and acquiring a loan at a lower interest rate when you borrow it against universal life insurance policy. You do not need to pay the loan because your cash value will be used to repay the loan if you default. You can withdraw a portion of your cash value without opting out of the policy. The partial withdrawals are tax-free.