Universal Life Insurance Offers Policyholders Different Options

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Similar to whole life insurance policies, universal life insurance offers customers a chance to save money for later in life as well as determine the price of their premiums. Essentially, the insurance company calculates the cost of insuring an individual and any premiums paid above that amount is credited to the cash value of the policy. This helps the insured build up more cash value in the policy quicker than whole life and will also allow them to decide on the death benefit during the life of the policy.

The cash value available with a universal life insurance policy can also be used to make the premium payments on the policy. There are typically three ways in which the premiums are made, including an initial lump sum payment to pay the policy completely at the start of the policy's life. Established monthly premiums can also be paid as well as a flexible premium schedule, with which the cash value of the policy can be used to pay part or the entire premium cost, provided the universal life insurance has a sufficient amount in the cash value to make the payments.

For many, universal life insurance offers the options they want in an insurance policy to protect their family from financial repercussions upon their death. It also helps them build up cash for retirement or to continue making premium payments on their insurance if they become unable to work.

Protection Needed For More Than Life

Persons who own their own business may want to consider more than universal life insurance to take care of their survivors. In many instances the life insurance may cover most, if not all of the bills, but rarely will it cover any business expenses. When talking to an insurance agent, it is often recommended that business owners also look into business insurance to make sure the life insurance is not taken up by other expenses.

One of the things some policyholders like about universal life insurance is that all administrative costs for this type of insurance is very transparent. Many of the costs of whole life insurance are not known or shared with the policyholder. However, with many of the different tax laws governing proceeds from and the handling of universal life insurance, all charges and fees are typically made very well known. Knowing the cost of doing business often helps many people decide on the best method of paying to protect their financial future.
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