Reasons to Take Universal Life Insurance Policy
Universal life insurance takes care of your beneficiaries financially when you die.
The variable universal life insurance enables you to invest your cash value in bonds, money market mutual funds and stocks. The interest that the fixed universal life insurance policy accumulates upon is based on the overall investment account of the company. There is a stable growth of your cash value regardless of the changes on the market. The advantage of this policy is that you get to choose how much cash value is to be put in the indexed account. Your cash value continues to grow even if the index goes down in the future because of the locking on the high rate of return. You do not invest the cash value directly into the stock market, therefore, it is less risky than the variable universal life insurance.
The price of universal life insurance is lower than whole life insurance. Decision-making by the policyholder of universal insurance is less intensive than a whole life insurance policyholder.
The policyholder enjoys flexibility in payment. Whole life insurance has fixed premiums that are payable on a regular schedule. The policyholder of whole life insurance policy makes fixed payments at a specific date every month. You decide the time and amount you will pay if you take a universal insurance policy. You can decide to increase your cash value amount paying more premiums. If the cash value is above a specific level, you can use it to pay premiums. If you have variable incomes you can pay premiums in bulk when you have enough money so that you do not pay for a few more months to come.
The amount you will get us death benefit in the whole life insurance is guaranteed, and you cannot change it. The policy allows you to lower your death benefits anytime you want so that it fits your financial needs. You do not plan for your income to reduce, but circumstances of life can force the situation to happen to you. You will have an additional amount on your premiums to pay because you will get a higher cash value. Reducing you are death benefits will lower their cash value that you are beneficiaries will get up on your demise.
The lender is not interested in your qualifications as long as you borrow the amount that is lower than the cash value of universal life insurance. You get the advantage of not paying income tax and acquiring a loan at a lower interest rate when you borrow it against universal life insurance policy. You do not need to pay the loan because your cash value will be used to repay the loan if you default. You can withdraw a portion of your cash value without opting out of the policy. You are not charged tax for withdrawing a portion of your cash value from the universal life insurance.