Universal Life is also a permanent life insurance. It is also called “Buy the term and invest the difference”.
Universal life policies allow policy holders to invest extra money into the market. Since the cash is in the market, client can earn or lose money in their insurance policies just like the market. It is the type of policy which gives policy holders flexible protection and allows them to chose their investment and payment. Investment and wealth accumulate tax free within the limits subject to government limits.
Universal life policies give policy holder the option to pay the premium as a level premium for a limited period where they pay for 10 or 20 years and policy gets paid up and the coverage remains in force all life.
There is another option where they can choose to pay as yearly renewable term where premiums are cheaper when they are younger and increase with age. This gives a lot of advantage to the policy holders to get extra coverage for a cheaper price to cover more protection at a younger age. There is always an option to level the premium at any time while policy is in force.
Universal life insurance is recommended for people of all walks of life. Whether you are an entrepreneur or an average blue-collar worker, you could benefit from such a policy. The policy will help you build your savings and provide your loved ones with financial support after you are long gone. If you are an entrepreneur, universal life insurance will also help you protect your business in a tax-efficient manner.
Many Canadians spend their entire life building their investment portfolio, assets, and wealth. And, they will do whatever is necessary to protect it. Universal life insurance is one of the best tools for entrepreneurs and those concerned about protecting their hard-earned assets.
Universal life policy helps pay the tax bill and protects the estate and the assets that are important for the family left behind. Meaning policy grows to meet tax responsibility and the family receives policy death benefit tax free and uses to pay taxes on estates.
Finally, family assets stay with the family. This is also called as asset protection strategy.
Contrary to belief, universal life insurance is fairly simple. While it does have some complex elements, you only need to know your monthly premium is divided into two categories. These categories include death benefits and investment savings. This basically means that part of your premium provides death benefits to your beneficiary (family) and the rest is invested. Your investment savings will continue to grow as long as you are making the premiums. With that said, some policyholders have reported their investments reaching a point to where it covers their premiums. If this may be something you are interested in, you can make it happen with universal life insurance.
Just like any other policy, Universal life policy can also be taken as a joint coverage as a single policy. Many couples find it easier to combine their life insurance coverage into a single policy. Well, that is an option with universal life insurance as well.
You will have the option of investing in a single or joint policy.
Some people refuse to obtain life insurance because they do not want to deal with an additional monthly bill. Yes, it does come with an additional expense but the rewards will make it worth every penny. If you are concerned about that issue, you should only consider a universal life insurance policy that consists of a “Paid-Up” feature. The feature will allow you to pay your monthly premium for a specific period of time. Once you have crossed that threshold, you will no longer be required to make your monthly premium. The investment you earn through the policy will cover the cost of your monthly premium.
When it comes to life insurance there really is no time that is too soon to get covered. And, this is because the younger you are, the cheaper those premiums are going to be. Not only this, but you are probably healthy right now.
If you wait until something bad happens, you will not only without a doubt face higher premiums, but you might not even be able to get covered at all.
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