Universal life insurance (sometimes referred to as cash value or permanent coverage) is life coverage that is designed to last for the entirety of your life.
There are no restrictions with regards to the length of the insurance, as there are with term life insurance, and the policy will pay out in the event of your death.
In addition to providing basic life insurance coverage, a universal life insurance policy will also give you a cash account. This is a great tool which will allow you to save for retirement and other expenses that may arise.
The premiums you pay can be split between the death benefit and the cash account. Having a policy with this added feature gives you increased flexibility. Not only do you have peace of mind that your loved ones are provided for in the event of your death, but the savings can often be realized at a later date, if required.
Universal life insurance should not be confused with whole life insurance; the two are different products. Universal life vs whole life vs term life can be summed up as follows:
- Universal life insurance is a whole life policy which can offer a cash value. The cash and death benefits are usually separated in this type of policy which means you can sometimes adjust premiums and coverage level as your circumstances dictate.*
- Whole life insurance gives the same level of coverage but the premiums are pre-determined. This means the cash value will generate a minimum level of interest and the death benefit is fixed. *
- Term life insurance covers you for an agreed ‘term’ and will only pay out in the event of your death during the period of coverage. At the end of the period (if you are still living) there will not be a cash payout as there is no cash value with this type of coverage.*
It is important to be fully aware of your needs and what benefits you are going to be getting for your investment. At Shelly Alvarez Insurance we make it our business to provide you with the best advice and coverage and we are always on hand to offer you the benefit of our expertise.
In summary, the key benefits of Universal life insurance are:
- Life insurance protection structured for your lifetime with coverage running to age 100-125 yrs on average.
- Death benefit payable is income tax free to your beneficiary (certain conditions apply).
- You can build up a cash value within the policy during your lifetime.
- Premium payments are flexible which means that you can usually pay more or less than the fixed premium.
For more information please contact us. Alternatively you can click on the link below to obtain a quote.
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