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. 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 get lower premium rate then the variable universal life because there is no management of the cash value account.
Universal life insurance costs less than whole life insurance. Decision-making by the policyholder of universal insurance is less intensive than 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 decide the time and amount you will pay if you take a universal insurance policy. Your cash value amount increases when you pay additional premiums but that depends on your choice. You are allowed to pay premiums using the cash value provided that it exceeds a specific amount. 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. You can decrease your death benefit in the universal life insurance. If your income drops, you should not drop out of the universal life insurance because you can get a reduction on the premiums and lower your death benefits. When your income levels increased you can also increase your death benefits. Increasing your will benefit the beneficiaries more because they’ll have more money to support them after your death.
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. You are not charged tax for withdrawing a portion of your cash value from the universal life insurance.