Uniqueness in Universal Life Insurance Policy
Universal life insurance takes care of your beneficiaries financially when you die.
You will build your cash value in the shortest time possible. 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. The advantage of this policy is that you get to choose how much cash value is to be put in the indexed account. Your cash value continues to grow even if the index goes down in the future because of the locking on the high rate of return. You do not invest the cash value directly into the stock market, therefore, it is less risky than the variable universal life insurance.
Universal life insurance costs less than whole life insurance. The flexibility and fewer guarantees that the universal policyholder has made it easier for them to make decisions, unlike a whole life insurance policyholder.
The policyholder enjoys flexibility in payment. Fixed premiums are payable at a fixed and regular schedule for a whole life insurance policyholder. You have to pay the same amount at a specific date each month. You are free to choose the amount and date of payment while under universal life insurance policy. You can decide to increase your cash value amount paying more premiums. 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.
The amount you will get us death benefit in the whole life insurance is guaranteed, and you cannot change it. 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. When your income levels increased you can also increase your death benefits. Reducing you are death benefits will lower their cash value that you are beneficiaries will get up on your demise.
You do not need to qualify for a credit if you’re borrowing against your life insurance policy. The can you borrow against universal life insurance policy has a lower interest rate that banks and does not attract income tax. You are not under pressure to repay the loan so long as you continue paying your premiums. You can withdraw a portion of your cash value without opting out of the policy. The partial withdrawals are tax-free.