Is Universal Life Insurance Worth?
If you’re looking for an insurance policy that aims to cover you for as long as you live, then whole life insurance is what you need. Perhaps the most notable feature of this policy is the cash value that accumulates while you’re religiously paying for your premiums.
You earn dividends because your insurer is investing part of it to stocks, bonds, and other financial instruments. Whole life insurance protects individuals throughout their lifetime. It’s worth the investment though majority of the people find the ‘would be’ premiums to be a little too pricey.
While whole life insurance is designed to help an individual attain a lasting peace of mind and that his beneficiaries can receive the benefits through dividends, term life insurance, on the other hand, focuses on specific timeframe coverage, picked up by the policyholder, and stated in the policy. The term usually starts at the first year and not exceeding thirty years.
Term life insurance is a viable option for people with an excellent health conditions and not more than fifty years of age. After that age, it becomes costly and no longer suitable for those who want to save money. This type of insurance is not all evil even though you get nothing if you outlived your policy. We’ve seen quite a few benefits from term life insurance including mortgage payment protection. In the event of premature death, term life insurance can pay off your debt thereby freeing your family from the financial worries.
Another interesting type of policy that caught our attention is the universal life insurance, which alternatively offers the same benefits of a whole life insurance and a cost-effective structure of term life insurance. The premiums are invested, earning cash value overtime. Unlike whole life insurance, you can use the accumulated cash to pay for the premiums. Universal life insurance believes that certain elements in the contract would need some changes in the future to reflect the policyholder’s changing perspectives, and thus it is allowed.
The whole idea of universal life insurance is to give policyholders the maximum benefits and flexibility that aren’t found in whole life insurance. It gives you the whole control of what to do with the coverage and saving components. Premiums usually end up in two parts: insurance and savings. As the policy owner, you will have a total control on how these variables are to be applied. For instance, if the savings portion isn’t performing well as expected, it can be used to pay off the premiums rather than using some external funds.
Among other things, universal life insurance guarantees a return of investment, stability, and peace of mind to its policyholders. In fact, it’s a safety net for anyone who is sending his children to college or for someone who’s planning his retirement and would need some funding supplements.
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