Universal Life
Millions of Americans each year choose to invest in life insurance. While there are a wide variety of whole life insurance policies, each comes with a number of limitations. To address the disadvantages of traditional life insurance, a relatively new insurance product has been introduced into the market: universal life (UL). For those seeking an alternative to whole life insurance, universal life insurance can be an excellent choice.
What is universal life insurance?
Intended to combine permanent insurance coverage with greater flexibility in the payment of premiums, universal life insurance offers the potential for greater growth of cash values. Universal life also addresses many of the issues that traditional life insurance policyholders face – namely fixed premiums and death benefits. With universal life, premiums and death benefits are uniquely flexible.
What types of universal life insurance are available?
There are several types of universal life insurance policies available:
- Interest sensitive universal life/traditional fixed universal life
- Variable universal life (VUL)
- Guaranteed death benefit universal life
- Equity indexed universal life
What is a flexible death benefit?
With a flexible death benefit, the policy holder has the freedom to increase or decrease the set death benefit. The policy holder may also choose between option A and option B death benefits. Option A, or a level death benefit, ensures the death benefit will remain level for the life of the insured. Option A also provides lower premiums. Option B is a variable benefit which pays out the cash value of the policy to the insured’s beneficiaries. If the cash value increases over time, so too does the death benefit. If the cash value declines, the death benefit also declines. Option B carries with it higher premiums than option A.
For more information regarding universal life insurance coverage, visit Insurance Hub’s website at www.insurancehubusa.com.