Universal life coverage is a permanent life insurance policy that is flexible and offers the low-cost protection of a term life plan, as well as a savings plan. Universal life coverage typically includes all the benefits of traditional life insurance rolled into one plan.
Benefits of Universal Life Coverage
Universal life coverage not only offers life insurance, but includes financial benefits that can cater to your savings, house purchases, car purchases, investments, mortgages, loans and education payments. Universal life usually has comprehensive benefits that you can adjust to meet your different needs throughout your life. The premium payment is adjustable, allowing you to determine the payment amount depending on what you can afford and your financial position.
Universal Life Coverage Vs. Whole Life
Universal life coverage allows insurers to change money between savings and life insurance components of the plan, which makes it more flexible than whole life insurance policies. Variable premiums are divided between your life insurance coverage and savings plan, which allows you to make alterations to your plan. Universal life coverage allows your cash value to grow at a variable rate and it is usually adjusted monthly.
Uses for Universal Life Coverage
Universal life coverage includes a savings plan, which can be used for a variety of options. Many use the savings portion to cover financial expenses upon death, such as funeral or burial and unpaid medical debt. Some use it to replace income for a family upon the death of the insured. Universal life coverage can also pay off personal and business debts. Universal life insurance not only provides benefits to the beneficiary, but also the owner of the policy.
The Premium of Universal Life Coverage
Universal life coverage is a very flexible plan in terms of payments. It is typically a cost-effective solution, and payments depend on your financial abilities. Even though the cash value of universal life policies change each month, your premium payments can remain the same if you set it that way. There are three types of universal life insurance premiums – single premium, fixed premium and flexible premium.
A single premium payment is just that – one initial payment. Most cannot afford this option and tend to utilize a fixed or flexible premium payment. Fixed premium payments of universal life coverage are a regular, standard payment. Usually, fixed premium payments are for a shorter period of time than the lifespan of the policy. Flexible premiums allow the insurer to vary the payments, which means they have a long-term effect on the policy. Flexible premiums usually allow a level of death benefit and a level of increasing death benefit.
Universal life coverage is a comprehensive plan that includes a death benefit, as well as a savings plan. It allows flexibility and many benefits for those seeking to save money while protecting the financial future of loved ones.
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