Universal life insurance is a flexible and versatile type of life insurance that provides both a death benefit and a savings component. Unlike traditional life insurance policies, universal life insurance allows policyholders to adjust their premium payments and death benefit amounts as their needs change over time. This makes it an attractive option for individuals who want to have more control over their policy and the ability to customize it to fit their specific financial goals.
Key Features of Universal Life Insurance
WIth Universal life insurance, YOU get to choose the amount that you will pay. This amount is called your “planned premium”. However, there is a required amount of premium that must be paid for the coverage to take effect when the policy is first issued.
One of the key features of universal life insurance is its cash value component. As policyholders make premium payments, a portion of that money goes into a cash value account, which grows over time. This cash value can be accessed by the policyholder through withdrawals or loans, providing an additional source of funds that can be used for any purpose, such as paying off debts, funding a child’s education, or supplementing retirement income.
Another advantage of universal life insurance is its flexibility in premium payments. Policyholders can choose to pay the minimum required premium to keep the policy in force, or they can contribute more to build up the cash value at a faster rate. This flexibility allows individuals to adjust their premium payments based on their financial situation, making it a valuable tool for those with fluctuating incomes or uncertain financial futures.
In addition to the flexibility in premium payments, universal life insurance also offers the option to adjust the death benefit amount. This means that policyholders can increase or decrease the amount of coverage as their needs change. For example, if a policyholder gets married or has children, they may choose to increase the death benefit to provide more financial protection for their loved ones. Conversely, if their financial responsibilities decrease over time, they can decrease the death benefit to lower the cost of the policy.
Some important things to note about Universal Life Insurance:
1. Since the cost of insurance increases as you age, your planned premium may no longer be enough to cover the admin costs and death benefit associated with your policy. This would mean that you would need to increase your premium to keep your policy in force.
2. When you first purchased the policy, you may have selected your planned premium based on the interest rates at that time. In the future, interest rates may not be as high. If your planned premium isn’t enough to cover the cost of the current premium, the difference is taken from your cash value. If you make no other changes to your policy at htis point, the cash value you have built up may eventually become depleted. To avoid this, you may need to consider decreasing your death benfit or increasing your premium (if you have the option), so that you are able to keep your coverage. Otherwise, your policy will lapse when the cash value is no longer enough to pay for the cost of insurance.
It’s very important to review your universal life policy carefully so you understand all of your options.
Each year, you will receive an annual statement which will show your current cash value and lets you know if you are paying enough premium to keep the policy in force. It’s important to reach out to your insurance agent if you have any questions about this statement.
Overall, universal life insurance offers a unique combination of flexibility, savings, and protection. It allows individuals to adapt their coverage to meet their changing needs, while also providing a way to accumulate cash value that can be used during their lifetime. Whether you are looking for a policy that can grow with you or a way to build up savings for the future, universal life insurance may be the right choice for you.
By having a conversation about life insurance, you are taking a proactive approach to protect your family’s financial well-being. It allows you to make informed decisions and tailor a policy that best suits your specific needs. While life insurance may not be a necessity for everyone, it is certainly worth considering as a means of providing financial security and peace of mind for both you and your loved ones.
At Blue Marsh Insurance, we understand that discussing life insurance can be a sensitive and challenging topic. However, we are committed to making this conversation as easy and informative as possible. Our experienced advisors are here to guide you through the process, answer any questions you may have, and help you determine the best life insurance solution for your unique circumstances.
Don’t wait another day to protect your family’s financial future. Start the conversation about life insurance today and discover the affordable options available to you. Your loved ones deserve the peace of mind and security that life insurance can provide. Plus – we bet you’ll be surprised at how affordable it can be!
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A little more about Blue Marsh Insurance…
When he founded Blue Marsh, Tom Davenport wanted to create a different kind of insurance company. One that’s built on personal relationships and a local presence. One where you, the customer, feel more like a friend.
As an independent insurance agency, Blue Marsh Insurance represents a carefully selected group of financially strong, reputable insurance companies. Therefore, we are able to offer you the best coverage at the most competitive price.
If you’re interested in starting a quote online or having us take a look at your current policies, click here!