|
Life Insurance
Universal Life Insurance
There are many types of life insurance policies that you can take up and Universal life insurance is one type. What are the particular features of this insurance type?
In universal life insurance you are taking a life insurance policy that is indefinite or permanent. It offers lot of benefits and flexible features for the policy holder. While other insurance policy types do not allow you to change the initial amount for which you took the policy, in Universal Life Insurance you have this flexibility. Therefore, at time of financial difficulties you do not have to do away entirely with a life insurance policy protection, you can opt for a lower policy amount and continue receiving coverage.
Those opting for Universal Life Insurance can choose how to pay their premiums – regular internal or one lump sum. In a situation where a policy holder fails to pay the premium as a result of financial difficulties, the policy does not expire. It still holds and will pay out for the premiums paid thus far. In case you want to increase you coverage, you can do it without taking out a supplemental insurance policy.
An important feature to note in a Universal Life Insurance policy is that the policyholder can borrow money on this policy, from the insurance company through surrender value and loans. In a surrender value, you surrender a part of the policy for immediate finance and loans can be obtained from the insurance company, just like from a bank. However, taking either of these options is not an advisable as it reduces the policy coverage.
Universal life insurance offers tax benefits too. Your beneficiaries will receive payment that is income tax free, in the event of death. You also need not pay estate taxes. The amount spent for premiums is free from taxation. However, you need to consult an auditor to get details pertaining to how you can use this policy type to get tax benefits.
Before signing up for a Universal Life Insurance policy, check out the policy features and the terms and conditions under which the policy will pay out. This way you can be sure it is according to your financial requirements.
|
