Universal Life Insurance
Universal Life Insurance
Types of Universal Life Insurance Policies
Traditional or Non-Guaranteed Universal Life Insurance
No Lapse Guarantee Universal Life Insurance
Indexed Universal Life Insurance
Variable Universal Life Insurance
Variable universal life insurance policies also allow policyholders to vary their premiums and death benefits within set limits. However, this type of policy allows for more control over investment options. Your cash value can be invested in multiple “sub accounts,” which may include stocks, bonds, or money market accounts. With this type of policy, customers can select their investments and must actively monitor them in order to ensure they have supporting cash value. This is a great option for those who are investment savvy and have a firm understanding of the market.
If you’re not sure which universal life insurance policy is best for your situation, don’t hesitate to reach out to the knowledgeable team at Carolina Insurance Partners today!
How Does Universal Life Insurance Work?
Universal life insurance policies operate a little differently than other life insurance products. A portion of your monthly premium is applied to the policy’s “cash value,” which earns a small amount of interest depending on the specific type of policy in place. You can even use the built-up cash value to pay for part of your monthly premiums and enjoy reduced payments. After you die, the remaining cash value will go toward the death benefit for your designated beneficiary.
Like any other life insurance product, your beneficiary will need to file a claim with your carrier to receive their death benefit. Once their claim has been approved (typically within 30 days of filing), they may use the funds however they like, including for funeral expenses, property taxes, continuing education, cost of living, and many other expenses.
If you’re not sure which universal life insurance policy is best for your situation, don’t hesitate to reach out to the knowledgeable team at Carolina Insurance Partners today!
Benefits of Universal Life Insurance
One of the biggest advantages of a universal life insurance policy is the investment aspect: By investing a portion of your premium each month, the idea is that the policy will eventually pay for itself. Customers can pay for a certain number of years, watching their investments grow until they eventually are able to cover the cost of the premium altogether. However, this benefit is largely based on market performance, which — given recent instability — may not always turn out as expected.
Another main draw for universal life insurance policies is the ability to adjust the face value of your coverage without surrendering the policy. This is especially beneficial for those who experience changes to their financial circumstances or responsibilities as time passes. Additionally, policyholders are able to withdraw or borrow against their cash value. It’s important to note that these withdrawals cannot be repeated as it will reduce the cash value amount, leaving you very little when you need it most.
Why Consider Universal Life Insurance?
Despite market uncertainty, a universal life insurance policy can still be a great choice for younger individuals looking to secure their financial futures. Individuals in their 20s and 30s are typically better suited for such policies as they have plenty of time to watch their investments grow and change as market performance fluctuates. By taking advantage of lower rates now, these policyholders will have a financial advantage in the future.