Jefferson City, MO Universal Life Insurance
Serving Jefferson City, Columbia, Osage Beach, Hermann, Fulton Missouri
Protection and Savings
This type of insurance does unite a lifetime protection with a savings module. The only thing that is required for it to be active all your life is for one to pay the agreed premium. Upon death, the beneficiaries receive a tax free benefit.
Universal life insurance advantages
Apart from it being a lifetime protection guarantee, it also has benefits like:
- The death benefit is adjustable
- Premiums are flexible
- The cash you pay gathers interest
- It is possible for one to withdraw cash or make a borrowing of it
Possibility of withdrawing cash or borrowing against it
Once you make the premium payment, a part of it is directed to the death benefit, while another part is directed to developing the savings module policy, which is also referred to as “cash value.” With time, one is permitted to borrow or withdraw cash that has accumulated for emergency purposes. This amount is not constant in all insurance companies. One thing to note is that borrowing or withdrawing money may trigger a policy death benefit reduction, or cause a tax implication that you will need to handle.
Earn a cash value or interest
The cash value in line with a fixed life policy does earn interest depending on the market of currency rates at that particular time. As a matter of fact, the interest rate will drop if the market rates drop too. However, some insurance firms do give protection to that, together with a performance assurance attached to the policy.
Premium flexibility
One is allowed to reduce or halt the payment of premiums on a Universal life plan, if his/her cost can be covered by the account. This may prove to be helpful when there is no money, but it also can be disadvantageous. For example, the coverage may terminate if you utilize the cash value of the account to pay the premiums.
Adjustable death benefit
After the elapsing of a particular period of time, one can have the need to increase the payout upon his/her death, something that is permitted by the majority of insurance firms, but on condition that one passes a medical test. Also, the death benefit can be reduced so as to lower the policy costs.
Whole life insurance and Universal life insurance-where is the difference?
- Universal life insurance allows one to adjust death benefits and premiums so as to fit your desires, while Whole life insurance death benefits and premiums are not flexible but fixed.
- Both provide lifetime protection if one pays the premiums.
- The cash value exists in both.
- Both have cash value interest that depends on the market rate at that moment.
- For a Universal life policy, the death benefit is flexible while it is fixed on Whole life.
- The premiums are flexible on Universal while fixed on Whole life.
Who may select Universal life insurance?
The following are some of the tips to help choose which policy best suits you:
When looking for lifetime protection
When you are looking for a guaranteed death benefit that will be there no matter how long you live, you are a good candidate for a Universal life policy. This type of policy will be paid out to your beneficiaries tax-free.
When your savings target is a long-term one
When your goal is to have a tax-deferred savings and you do not intend to use the money for a prolonged period of time, Universal life may be a good fit for you. The reason behind this is that the cash value will accumulate over time and will allow options down the road such as producing an income stream in retirement.