When you think of buying life insurance, you might have term life and whole life insurance come to mind. However, you should consider the mix of these two policies before you start looking for life insurance quotes. This is universal life insurance.
Definition
This policy also called universal life, it is a type of permanent life insurance that has additional features and advantages; it accumulates cash value through investment of the premium payments, it is similar in some ways and was developed from whole life insurance.
The attractive feature of this policy is that it has flexibility of premium payments, and has greater potential for cash value growth; the buyer has the chance to change the policy to suit his changing needs. In another word, this policy allows the buyer to decide how much of his premiums will be used for the insurance benefits and how much for investment.
If things go well, he can increase the investment part of the policy if the market is good, so that he can gain more profit, or if he has financial difficulties, he can use the accumulated cash value to pay for his premium. As a result, the buyer benefits protection and at the mean time can have his premium invested in the market.Advantages
Flexible protection - it provides the buyer the flexibility to choose the amount of protection he wants, and allows him to increase or decrease the coverage, but increased coverage may subject to underwritten requirements.
Flexibility of premiums - it offers the buyer the flexibility to pay either lesser or more premium depending on the circumstances.
Guaranteed return of money - if the insurance company made profit on investments, the interest return of the cash value will increase, but no matter how bad the investments were, the buyer is guaranteed a certain minimal return on the cash portion.
Tax free death benefits - life insurance proceeds are generally income tax free to the beneficiary in most of the countries.
This policy also has its disadvantages, such as fewer guarantees than whole life insurance, no investment flexibility; the growth in cash value of the policy is limited.
It is said this policy is illegally sold as an investment, and some insurance agents recommended it to their customers because they earned more commission on this product compared to others, buyers are advised to know this product thoroughly before they purchase.
Life insurance is a complicated industry, especially if the product has some involvements in investments, therefore it is advisable not to commit blindly. Find out more or seek advice and information from reliable sources, make your money return, invest sensibly, please log on to universal life insurance or visit us at http://www.indianapolislifeinsurance.net
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