Characteristics of Universal Life Insurance – Understand Terms and Benefits
Characteristics of Universal Life Insurance Understand Terms and Benefits
The concept of universal life insurance was introduced in the early 1980s. It is a form of permanent life insurance that offers a cash value option. It has characteristics of both term and whole life insurance because it allows customers to choose the way they prefer to pay and the coverage they receive every year while interest rates are adjusted every month. There are various terms used to describe the characteristics of universal life insurance that you will want to understand before you sign up for one kind of policy or another.
When you hear the phrase "account value," what is being referred to is the accumulated amount being contributed to the policyincluding interest and your monthly premiumminus all charges taken out of the account's total. "Cash surrender value" is the account value when outstanding loans and surrender charges have been deducted. The "premium" is the amount you, the policy holder, are required to pay to keep the policy open and available to you. "Death benefit options" are the various ways in which your account builds money that is eventually redeemed by your family once you pass away. There are several options that you can choose from once you decide that universal life insurance is right for you.
One great characteristic of universal life insurance is that it has so many great benefits, the first of which is its high level of flexibility. It is easy to speak with a representative and adjust your policy based on your family's changing needs. For instance, if you need to change your premium payments or timing, you can do so by simply having your death benefit amount adjusted. Plus, universal life insurance is considered one of the more affordable life insurance options today. As long as your monthly payments continue to cover insurance charges, your cash value accumulation will remain intact.
Once you pass on, your family can use the universal life insurance policy in many ways. The first way in which they will probably use it is to fund to your funeral and burial expenses. You will be given a proper send off thanks to the insurance you bought during your lifetime. Then, funds that are remaining can be used to pay for a wedding of your child, fund college educations, and help your surviving spouse move into a new home. All of this might be impossible without your flexible, beneficial universal life insurance policy.
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