Universal Life Insurance is a prevalent form of permanent life insurance that comes with a multitude of benefits, a useful investment savings element, and different premium options. Learn about the most important aspects of universal life insurance to help you decide if that’s the right choice.
What Is Universal Life Insurance?
Universal life insurance is a type of permanent life insurance that provides much more range price and policy-wise compared to whole life insurance. It has an investment savings element and relatively low premiums, making it one of the most popular forms of life insurance.
Any excess of the flexible premium payments exceeding the current cost of this insurance policy supplements its cash value, allowing it to accumulate over time.
How Does Universal Life Insurance Work?
When you’re looking to purchase the best universal life insurance, you’re going to be met with much more flexibility than whole life insurance. This type of insurance consists of the insurance premium itself, and an additional saving component that supplements its cash value. The garnered interest grows on a tax-deferred basis, which increases the cash value of your insurance policy.
The insurance premium is the minimal amount of payment mandated to keep the policy, and it includes mortality charges, policy administration charges, and many more. Once there is deposited money in the account, you can pay your premiums at any time, and increase or decrease your death premium.
There are three most common types of universal life insurance, which are:
- Indexed Universal Life Insurance. In this form of insurance, your cash value is linked to one of the most popular stock market indexes, such as S&P 500, Dow Jones Industrial Average, and Nasdaq.
- Guaranteed Universal Life Insurance. Now, this is the purest form of universal life insurance. It has a strict no-lapse policy, meaning that the amount you deposit is the amount that is left. Your cash value is not tied to any market.
- Variable Universal Life Insurance. It is a form of universal life insurance where your cash value is put into a mutual fund, which is then invested by investment professionals, increasing or decreasing your cash value.
Universal life insurance, in general, is a policyholder friendly form of coverage that doesn’t strain your wallet as much as whole life insurance. It gives you a great way to provide for your family or beneficiaries once you’re no longer a part of their lives.
The Benefits of Universal Life Insurance
Universal life insurance comes with three essential benefits:
Maximum Flexibility
When it comes to universal life insurance, you’re going to get a lot of wiggle room, which will allow you to modify your policy to your personal preferences. This form of insurance comes with many different packages and options, allowing you to truly make it your own – and secure a bright future for your beneficiaries when you’re gone.
A Guaranteed Death Benefit
One thing that people seem to forget is that dying is quite expensive. The funeral expenses, death tax, and supporting your family once you pass isn’t cheap, and a guaranteed death benefit helps quite a lot.
A death benefit will allow your family or beneficiaries to cover any expenses you leave in your wake, making your death less of a financial burden.
Cash Value and Accessibility
Even if you can access a portion of your cash value from your universal life insurance, you can still rest assured knowing that you have a guaranteed death benefit.
The monthly premium secures this benefit, and any added cash value is garnered through additional deposits. This means that if you’re in a financial pinch, you can get a portion of your cashback.
Should You Buy a Universal Life Insurance Policy?
A universal life insurance policy is one of the better life insurance policies, as it’s very policyholder friendly. Any insurance is good insurance, and this one will help you support your beneficiaries after your passing – and give you a couple of benefits while you’re still alive and kicking.
If you’re looking for the best universal life insurance company in Michigan, you need not look any further than the Melton McFadden Agency.
Melton McFadden is an industry leader and offers competitive universal life insurance policies that are carefully catered for you, the future policyholder. When you’re working with us, you’re a part of our family, and we can guarantee nothing but the best policy for you – so don’t be afraid to give us a call.
Contact us today to get an insurance quote or inquire about any of the many insurance policies we offer.
