When people think about life insurance, they typically focus on only the amount of the death benefit. But there are some types of life insurance coverages that can actually offer significant benefits to the insured while they’re still living. One of these is universal life insurance (UL).
Universal Life Insurance combines the best of both worlds — the affordability of term life insurance with the long-term security of permanent life insurance. This is because universal life insurance is designed not only to address your current insurance needs, but your future needs as well. It can potentially provide lifetime security for you and your family over the course of many years. This type of life insurance is characterized by great flexibility, as you can determine the amount and frequency of premium payments, adjust the amount of coverage and benefits, and enjoy the accumulation of cash value over time. For additional cost, a variety of optional riders and benefits are available to add to the universal life policy so that you can design a custom level of insurance coverage specific to your individual needs. This means that one policy can be adjusted to meet your insurance needs as they change throughout your lifetime.
Universal Life Insurance premium payments cover both the savings (or investment) element and the expense part of the policy. It is designed to offer a money market-type investment that pays a market rate of return, the stated interest on the investment portion changes along with movement in interest rates, which means performance of the policy is linked to the overall economy as well. Another advantage of universal life insurance is that it often provides a way to access the accumulated cash value of the policy should you need it.
What kinds of expenses can a Universal Life insurance policy cover?
1. Your Income. Daily needs like utilities, food, medical care, and car loan payments.
2. A mortgage. Who would pay your home’s mortgage without your paycheck? To lose a house in the midst of dealing with a loved one’s death is an emotional disaster.
3. Student Loans. Many private lending institutions will not forgive debt in the form of education loans in the event of the death of a parent who may be a co-signor on the loan. In fact, it could also trigger repayment obligations for the loan.
4. A business. If you own or are partners in a business when you die, it is advantageous to have funding in place for the surviving partner to buy the deceased partner’s interest in the business. Finding the right person may take time and resources the business may not have without life insurance.
5. A retirement. Experts agree there should be a minimum of 10 times your annual pay in order to retire at age 65.
6. Final/Funeral expenses. With funeral expenses increasing every year, the average price of a funeral now exceeds more than $8,000. Without enough funds you may be forced to cut back on the service or ask friends and family for donations. A specific Final Expenses Life Insurance policy can cover these as well.
Life insurance needs vary from person to person. If you’re interested in learning which one is right for you, contact Gregg Suggs Insurance. We can tell you why life insurance might be a good option for you and help you find the right protection at the right price.
Not sure if Universal Life Insurance is for you? Learn more about these other types of Life Insurance policies: