Question By: You might be watching, or currently hold separate long and short-term life assurance policies. What is universal life insurance? Universal life assurance is like whole life assurance, but it allows you to choose your own premium and therefore the benefits which will come alongside it rather than picking from a predefined policy.
A universal life policy has a cash value system attached to it. The money that you pay into the policy over and above your premiums is paid back to you in cash value. The cash value accrues interest each month and it works sort of like a savings account in this way. The only thing that varies in this type of policy is the amount of interest attached to the cash value – and you get to determine the amount of interest. This makes for a very lucrative, flexible, and preferred type of policy.
Look closely at the options that are offered with a universal life policy. There are three types – flexible premium, fixed premium, and single premium.
Pros:
• Option to adjust benefits based on needs over a period of time
• Option to pay smaller or larger premiums
Cons:
• Premium payments need to be adjusted from time to time or you could be left without coverage if they're too small for too long.
• If your money isn't invested wisely by the insurance company you may wind up paying higher premiums later on to counteract the negative balance effects.
To get further information and options available for the universal life insurance policy, be sure to visit Ideal Insurance Agency [https://www.idealins.com].
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