Universal Life Insurance Guide

September 29th, 2021 by admin Leave a reply »

Universal insurance policies are a form of whole life products that most of you are quite common with. Term insurance policies provide coverage only for a specified period of time, whether permanent policies require you to pay premiums for the entire life and respectively provides coverage for as long as you live. It is important to understand this difference, because universal policies can be regarded as a combination of term insurance with some of the investment options provided only with whole life policies.

Universal insurance policies are a specific insurance product that targets certain groups of people, while other groups may think it’s useless for them. To make it clear to you, here’s a short explanation of a universal life insurance policy. Like any other insurance policy used for covering life, universal policies have death benefits that are paid out when the policy holder passes away. This is what both term and continuous policies provide. However, universal policies also incorporate an element, which is more common in continuous policies: an additional tax-free savings account. This account is used to accumulate money over a long period of time, which then can be employed for paying your insurance premiums instead of you. To put it in other words, your policy will start paying for itself over a certain period of time so you won’t have to pay premiums for the entire policy term. Besides, this money can be used for other purposes as well, without affecting your death benefit like in case of whole life insurance policies.

But not everyone will find such policies useful. Universal insurance policies are most useful for those who are looking for long term insurance services and plan to have coverage upon retirement. In order to accumulate any significant amount of money at your savings account within universal insurance you’ll have to pay insurance premiums for at least 15 years before getting any results. So anyone looking for less prolonged coverage plans or mortgage securing options should look into other insurance products or special investment tools, rather than universal policies. Otherwise, having such a policy for a long time will sure give you certain possibilities that other insurance products.

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