Sunday, September 26, 2010

Universal Life Insurance Quotes

For those individuals thinking about getting a life insurance policy, it is always good advice to study up on the different options, such as universal life insurance, prior to acquiring a policy.
When you to turn to for a universal life insurance quote, you give yourself the opportunity to learn as much as possible regarding this form of coverage and get yourself a good rate.
Before getting your universal life insurance quotes, note that this coverage is a form of permanent life insurance centered on cash value.
In this case, the policy is established with the insurance company where premium payments higher than the cost of insurance will be credited to the cash value. The cash value is credited monthly with interest, and the policy is debited monthly by a cost of insurance charge, along with any other policy charges and fees which are drawn from the cash value if no premium payment is made that month. The interest credited towards the account is decided by the insurer; at times it is tied to a financial index like a bond or other interest rate index.
Obtaining a universal life insurance quote is easy and attractive considering the fact it offers a savings element that grows over a tax-deferred basis.
When you get your universal life insurance quotes, remember that like with any product, there are pros and cons when it comes to this line of life coverage.
One thing to keep in mind prior to getting your universal life insurance quotes is that a large number of universal life insurance policies offer a no-lapse guarantee.
That simply means that as long as you meet the minimum designated premiums, the policy will remain in force up to age 100 (or even to age 120....should you somehow reach that point). On the flip side, paying the minimum guaranteed premium is oftentimes not sufficient to put together significant cash values.
So what are some of the pros and cons after receiving a universal life insurance quote to possibly purchasing one of these policies?
Universal life offers you the flexibility to adjust the death benefit as your requirements change over time.
You can have the flexibility to make smaller or larger premiums, which of course will depend on your financial needs. This can be an important item for families who could be dealing with fluctuations in their ability to meet the payments.
When it comes to the universal life insurance payout figure, it will be determined by selecting one of a pair of options for setting up the policy.
First there is the death benefit where the cash value of your policy is used by the insurer to mitigate the risks they are taking on, permitting the company to lower the mortality costs of your policy and decrease your premium payments.
Secondly, the cash value will be included with the death benefit of your policy. Depending on mortality tables, the cash value you choose to invest in the policy and the amount of death benefit your insurer will grant you, a universal life insurance policy can bring forth a very large payout amount.
As far as potential problems with a universal life insurance policy, in the event your premium payments are too minimal for too long, the policy could lapse, thereby leaving you without insurance protection.
When getting your universal life insurance quotes, remember too that if the insurer does not do well with its investments, the interest return for the cash portion of the policy will decline.
That decline however will never go below the minimum interest rate set aside in the contract. If this is the case, cash values are likely to fall, thereby leading you to pay more in premiums down the road.
If someone tells you as you're getting a universal life insurance quote that the coverage is too expensive, be sure to inquire as to why they feel that way.
It is not a secret that some financial advisors will tell you to think twice about this kind of plan for that they are more expensive than comparable term life insurance. In the event you've got several millions of dollars in assets sitting around, you can in fact benefit from a universal life insurance policy.
At the time you pass away, your estate will most likely be inherited by a member of your family, perhaps your child.
The value of your estate will determine how much in estate taxes your beneficiaries will be responsible for. If the estate has a value of $2.5 million, the beneficiaries would have to foot the bill for $250,000 in estate taxes.
It is important to note that a universal life insurance policy can permit you to accrue enough cash to meet the estate taxes and leave behind income for your loved ones. If that is the case, it will remove the need to liquidate assets to pay for expensive estate taxes.
Given that the laws of estate taxes can be quite complex, make sure to confer with an estate planning professional.


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