When Should I Buy A Universal Life Policy?
Universal life insurance provides a unique opportunity to have life insurance and save money for the future. However, many individuals don't know when they should buy a universal life insurance policy. But in order to know if a universal life insurance policy is right for you, it is important to understand it.
First of all, universal life differs from term life insurance and whole in a number of ways. The first way is that the premiums are flexible. Where the premium for term insurance goes up with age, despite how low it can start out, universal is flexible. Whole life insurance has a level premium, which means it is fixed.
Universal also gains cash value like whole life insurance does. The premium that you pay has a portion of it placed in investments. You don't get to choose these investments because the insurance company does. Nevertheless, over time, the cash value will reach a point in which you can take a policy loan from it if you need the money.
What Makes it Attractive?
The flexible premiums are one of the aspects of a universal life insurance policy that makes it so attractive. If it is too high, an individual has the ability to change it without having to cancel the policy and open a new one. This simple change can be made in order to make the premium more affordable.
Another advantage of the flexible premiums is the fact that the policy continues to gain cash value as it is supposed to. However, the portion of the premium that is invested may change, which may change the return amount. Nevertheless, you can keep your policy in force.
One way in which you can keep the policy gaining cash value at full force is by using the cash value to pay the premiums. This can result in you not paying premiums for quite some time, yet you are still able to keep your policy open. All you have to do is tell the insurance company that you desire to do this and they will do it for you.
And then there is the fact that this is a form of permanent insurance that will last for the remainder of a person's life. Many crave to have this type of coverage for their families. In the end, the families will benefit greatly.
Anyone of any age can open a universal life insurance policy. However, the largest benefit is going to occur for those who are younger. This is because they have a longer amount of time for the policy to gain cash value.
In other words, an individual who is 30 is going to have a lot more time for the money that is invested to gain cash value than someone who is 60. But if the person who is 60 lives until they are 90, they have had 30 years for their policy to gain. This is better than a lot of individuals are able to achieve.
What this means for you is that you can open your universal life insurance policy whenever you buy life insurance. It doesn't matter if you are 30 or 60 because you don't know how long you will live. It is always good to be safe rather than sorry.
So when looking for a quality form of permanent life insurance that will not discriminate based on age, you may wish to consider universal life insurance. The premium is not that of a term policy, but you are offered many benefits that term and even whole life cannot give you.