The Benefits of Universal Life Insurance

Chicago Life InsuranceA Universal Life Insurance policy is a flexible premium flexible benefit life insurance policy that accumulates cash value.  This policy is the most flexible policy in most insurance portfolios.  You can change the premium amount, usually after the first two year minimums are met, and change the death benefit as your needs change.

As with all life policies the primary reason for purchasing this policy is for death benefit.  Let’s cover the specific benefits.

Tax-Free Death Benefit – Under current tax laws, individual life insurance proceeds are income tax free to the beneficiaries.

Tax- Deferred Account Growth– The policy’s value earns interest on a Tax Deferred Basis.  Each company has varying interest rates and varying guarantees.

Security-A life insurance policy is generally purchased to protect one’s loved ones from hardship in the event of the death of the insured individual.

Flexibility-The insured determines the amount of insurance that they need based on their specific circumstances.  An advisor can help you determine that amount.  The Death Benefit of a UL may be adjusted up or down, unlike other life insurance products.  This is a wonderful benefit and very appealing to people of all ages.

Eligibility-The named insured must qualify health wise in order to obtain any coverage.  Generally the higher the death benefit amount, the more stringent the underwriting requirements.  See your agent for details

If you are looking for more information about Life Insurance coverage, please fill out one of our Chicago Life Insurance Quote forms.

Universal Life Insurance – Insurance Definition of the Week

Universal life coverage can be quite confusing. Basically it is an adjustable benefit life insurance policy that accumulates account value over time. Each time one makes a premium payment, a small percentage is deducted as an expense fee and the rest is added to the policy’s account value, which also earns interest monthly. One of the biggest benefits of this account is that it has a flexible premium. Therefore, one can change the death benefit and premium payments in order to suit their changing needs.

Other benefits of universal life insurance include account tax-deferred account value growth. According to State Farm, “Your policy’s Account Value earns interest at the company’s current interest rate — federal income tax deferred. The current interest rate is guaranteed to be at least 4% a year.” In addition, one can also make withdrawals from their policy if necessary, and at that time, they will then pay taxes on the cash withdrawn. Overall, universal life insurance is good if you need a policy with the flexibility to make changes in accordance to your lifestyle.

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