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The Four Benefits of Having a Universal Life Insurance Policy

Suppose you’re looking for a life insurance plan that meets your needs while allowing you some flexibility. In that case, universal life insurance may be the answer. Universal life insurance, as a type of permanent life insurance, provides numerous benefits you can take advantage of. If you want to know these benefits, this guide will reveal everything you need to know before applying for a policy. What is Universal Life Insurance? Before delving into the various benefits of universal life insurance, you should first understand what it is. These policies are divided into two parts, the first of which is the insurance you receive. This is the death benefit that is paid out upon passing away. The second component of universal life insurance is the policy’s cash value. When you make a monthly payment for your insurance, the insurance provider deducts the cost of your insurance and deposits the remainder of the payment into the cash value account set up for you.  Four Benefits of Purchasing Universal Life Insurance Because of its numerous advantages, universal life insurance may be ideal for you. The following are four primary benefits, ranging from flexible death benefits to the possibility of increasing your cash value. Withdraw funds or borrow against them When you pay your premium on a universal life insurance policy, a portion of the money goes toward the death benefit. Another portion is used to increase the cash value of the policy. Withdrawing or borrowing against the policy’s cash value becomes an option after a certain period has passed (the available amount will vary by company). The rules governing how and when you can do this differ depending on the insurance company and policy. However, you should be aware that this may reduce your death benefit, resulting in a tax implication or even causing your policy to lapse. Its premiums are variable and flexible A universal life insurance policy allows you to pay very flexible monthly premiums. Additionally, you have the option of increasing your monthly premium payment as well as altering the frequency and size of your payments. Any additional funds you add to your payment will be credited to your cash account, thereby increasing its total value. Suppose you want the remaining amount owed deducted from your cash value account. In that case, you can pay less than your monthly premium payment. This option requires that you have enough money in your cash value account to cover the difference. Otherwise, your insurance policy may become null and void. Possibility of value increase You can also effectively increase the money in your cash value account. These funds earn interest at a rate determined by your insurance company. Your interest earnings are credited to your cash value account.  Offers flexible death benefits The death benefits provided to your family by a universal policy are flexible. You can increase these benefits with this policy if you need more in the future. However, keep in mind that a medical exam will almost certainly be required for additional coverage. If you’ve had your policy for a while, you can also lower your monthly premiums by lowering the death benefit.  Universal life insurance provides adjustable premiums, flexible death benefits, and interest rate payments. It is permanent life insurance, so as long as the premiums are paid, the policy remains in effect until the insured person passes away. Contact a life insurance agent today for an instant quote on your various life insurance policies.
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