One of the benefits of Universal Life Insurance is that it's the
most flexible type of policie you can have for yourself. After the
initial premium payment, the insured has the option of paying higher
or lower premiums as long as they pay the minimum payment. Universal
policies have many similarities to whole life policies because the
idea of universal policies basically derived from the idea of whole
life policies. Following are some aspects of universal life
insurance that will help you understand the concept and make an
informed decision.
Insurance
By State
Alabama, Alaska, Arizona, Arkansas
California, Colorado, Connecticut
Delaware, Florida, Georgia, Hawaii
Idaho State, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana,
Maine
Maryland, Massachusetts, Michigan
Minnesota, Mississippi, Missouri Montana, Nebraska,
Nevada,
New Hampshire, New Jersey,
New Mexico, New York, North Carolina
North Dakota, Ohio, Oklahoma
Oregon, Pennsylvania, Rhode Island
South Carolina, South Dakota
Tennessee, Texas, Utah, Vermont
Virginia, Washington, West Virginia
Wisconsin, Wyoming Capital
What are the Types of Universal Life Insurance?
There are three main types of basic Universal Life Insurance. The
Single Premium type involves one large premium payment at the
beginning of the policy. This policy stays in effect as long as this
payment covers the "cost of insurance," or COI, charges. With a
Fixed Premium Universal Life Policy, the insured makes monthly or
annual payments for a fixed amount of time. If an insured chooses a
Flexible Premium Universal Life policy, they can choose how much to
pay on their premiums as long as they make a minimum payment. The
insured can also choose between a level death benefit or an
increasing death benefit.
How Does Universal Life Insurance
Work?
The process of a Universal Life Insurance policy can be complicated.
First of all, five percent of each premium payment is used toward
basic expenses, including processing charges and other fees needed
to keep the policy in effect. The other 95 percent goes to the
policy's Account Value. The Account Value earns interest which gets
added to the policy each month. Although the interest rate changes,
the policy guarantees at least four percent annually. During the
life of a policy, the insured can increase or decrease their
premiums as well as the amount of insurance. For instance, they can
borrow money from the accumulated value, thus reducing the amount
paid out after their death.
What is Variable Universal Life Insurance?
Variable Universal Life Insurance, or VUL, allows the policyholder
to invest the policy's cash value in different accounts. This is
similar to mutual funds in that the insured can spread the cash
value over several investments. VUL is a form of Universal Life
Insurance because it gives the insured the option of paying
different premium amounts as long as the follow the policy's and the
IRS's regulations.
Life insurance can be a complicated idea. When you start looking
at all the different types of insurance, it can be quite
overwhelming. Universal Life and VUL may seem difficult to
understand, but many people choose them because of their many
advantages over other types of life insurance. The important thing
to remember is to evaluate your needs and find the type of insurance
that is best for you and your beneficiaries.