Universal life insurance is a type of insurance that covers both whole and term life policies, depending on consumer preference. Universal life insurance polices offer varying premiums, depending on current interest rates. High interest rates mean equate to higher cash value accrued on the policy, which often translates to lower monthly premiums. Terms of a universal life insurance policy can be adjusted on a yearly basis in order to continue to meet consumer's needs.
Build Cash Reserves
Like a whole life policy, a universal life policy can accrue a cash value. The longer the policy is in effect and the more premiums that have been paid, the more cash value is accrued to the policy. In some cases, consumers decide to utilize these cash values for home improvements, paying medical bills, for a college education or even for a vacation.
Interest Paid
Higher interest rates mean higher interest paid on a universal life policy. Consumers can make an option to have interest earnings help to pay or pay monthly premiums when interest rates are high.
Flexibility
A universal life insurance policy allows individuals to determine exactly how much insurance they want or need. In some cases, policy holders can adjust death benefit and monthly premium amounts to suit personal and financial needs.
Death Benefits
Death benefits in a universal life insurance policy are tax free, which means that beneficiaries don't have to pay income taxes on any death benefits paid out from the policy.
Growth
The account value of a universal life insurance policy can offer tax-deferred benefits. For example, a universal life insurance policy from State Farm offers interest rates at approximately 4 percent, meaning the policy will earn the same interest rate as the company who offers it does.
Member Comments