Should I Buy Universal Life Insurance
There may not always be a simple yes or no answer to that question. Even in cases of yes there is the question, 'how much universal life insurance coverage should I buy'. There is a simple checklist that can be followed to determine if universal life insurance is a good fit for your situation. There are also a number of ways to determine how much insurance you should purchase as well. These and other related topics are addressed in the text below.
Suitability
The first aspect that many point out regarding universal life insurance is that the policies have flexible premiums. This is something that may appeal to some customers. There is a direct correlation between the premium and the benefit though; the higher the premium, the greater the benefit that is paid; the lower the premium, the lower the benefit that is paid. This feature does allow the policy holder to change things to meet their budget or their need though. For example, if someone becomes pregnant there may be reason to increase coverage for the duration of the child's childhood. There is also term life insurance that may supply that additional coverage with different rules and costs.
There is a savings element as well. This element is part of what increases the cost. It is however what ensures that there is cash value that assures the policy holder a guaranteed death benefit. Savings or cash value is something that most term policies do not offer, for example. This may be a motivator for some to select increasing the premium during times when there is greater need. It is an important consideration to estimate how much return could be earned on the savings realized by selecting a term policy over additional coverage in a universal life insurance policy for the specified time.
The final consideration is a distinction between whole life and variable life. With variable life the individual is able to use the interest earned to help pay for the premium. It is important to review the particulars of the specific policies being compared though. Not all policies will have the same rules.
How Much Coverage Do You Need
This is a topic that many dread facing. There are some basic considerations that nearly anyone should address though. The first of these is the cost of the funeral. This is something that can be determined when the funeral is being planned. When developing your cost estimate be certain to consider factors such as inflation, unless the cost is a fixed amount. Beyond that, other considerations–such as debt and remaining costs of caring for dependents–are included. This term’s dependents include any individual that is dependent on the individual the policy is written for. Some examples include children and disabled individuals.
The consideration of caring for individuals need not be the limit of the benefit though. In some cases the policy may be intended to make a benefactor financially independent. This would likely increase the amount of the desired benefit, which may increase the premium. In some cases this intention may be addressed later in life to reduce the cost of the insurance. Adequately planning to ensure there is sufficient time to accomplish cash value is essential as well though.
For more information from Steven on how to buy life insurance and annuities, visit our Annuities site. Or if your looking for best life insurance you can visit our insurance site! You can also visit our Retirement site to learn about retirement plans. Feel free to check out our Insurance blog too!
Suitability
The first aspect that many point out regarding universal life insurance is that the policies have flexible premiums. This is something that may appeal to some customers. There is a direct correlation between the premium and the benefit though; the higher the premium, the greater the benefit that is paid; the lower the premium, the lower the benefit that is paid. This feature does allow the policy holder to change things to meet their budget or their need though. For example, if someone becomes pregnant there may be reason to increase coverage for the duration of the child's childhood. There is also term life insurance that may supply that additional coverage with different rules and costs.
There is a savings element as well. This element is part of what increases the cost. It is however what ensures that there is cash value that assures the policy holder a guaranteed death benefit. Savings or cash value is something that most term policies do not offer, for example. This may be a motivator for some to select increasing the premium during times when there is greater need. It is an important consideration to estimate how much return could be earned on the savings realized by selecting a term policy over additional coverage in a universal life insurance policy for the specified time.
The final consideration is a distinction between whole life and variable life. With variable life the individual is able to use the interest earned to help pay for the premium. It is important to review the particulars of the specific policies being compared though. Not all policies will have the same rules.
How Much Coverage Do You Need
This is a topic that many dread facing. There are some basic considerations that nearly anyone should address though. The first of these is the cost of the funeral. This is something that can be determined when the funeral is being planned. When developing your cost estimate be certain to consider factors such as inflation, unless the cost is a fixed amount. Beyond that, other considerations–such as debt and remaining costs of caring for dependents–are included. This term’s dependents include any individual that is dependent on the individual the policy is written for. Some examples include children and disabled individuals.
The consideration of caring for individuals need not be the limit of the benefit though. In some cases the policy may be intended to make a benefactor financially independent. This would likely increase the amount of the desired benefit, which may increase the premium. In some cases this intention may be addressed later in life to reduce the cost of the insurance. Adequately planning to ensure there is sufficient time to accomplish cash value is essential as well though.
For more information from Steven on how to buy life insurance and annuities, visit our Annuities site. Or if your looking for best life insurance you can visit our insurance site! You can also visit our Retirement site to learn about retirement plans. Feel free to check out our Insurance blog too!
The Real Truth about Universal Life
In essence a universal life policy is a forced savings account coupled with pure insurance. The monthly premium is credited to the account and the cost of the insurance is then debited from the account. The ability for the cash value in the policy to increase over time based on interest and principle allows for the insurance portion of the policy to be paid for. As the age of the insured increases, so does the risk of the insurance company. A proportionate amount of increased premium is debited from the cash value of the policy to pay for the higher risk insurance.
The idea is to allow the cash value in the account to increase faster than the increase in premium cost. This will allow for either reduced premiums as the cash value grows or for premiums to become unnecessary after a fixed period of time. In the case of a single premium universal life policy, there is a one-time premium payment at the inception of the policy. The policy remains in effect until either the insured dies or the cash value of the policy is depleted by the cost of insurance.
Universal life policies should not be looked at primarily as investments vehicles, in fact it is against the law to do so. This is done primarily because of the tax advantages inherent to universal life policies. With a universal life policy, you can borrow against the cash value without incurring tax penalties. There are other tax advantages to universal life policies.
Benefits
Universal life policies have many benefits and can fit a number of needs for estate and financial planning. Some of these needs are obvious, like final expenses and income for dependents. Others are not so obvious, like a company paying for a policy on a CEO. This is a form of a bonus for the CEO, the company can write off the premium as a cost of business and the CEO only need pay income tax on the premium amount.
Companies also use universal life polices as a non-qualified deferred compensation package for personnel. This allows the company to pay for the policy and hold all rights to the cash value, then upon the retirement of the insured pays benefits to them. In the case of the death of the insured the company pays the benefits to the insured’s beneficiaries.
Universal life policies can be used to protect assets from frivolous litigation (in some states) or as collateral to guarantee a loan against the death of the insured/borrower.
Cautions
It is possible for a policy to lapse if payments are not continued on a regular basis. Some policies offer a no lapse guarantee; make sure you understand what is actually guaranteed before making your choice. A withdrawal or loan against the cash value in the policy can also affect the death benefit or possibly cause the policy to lapse, even if there is a no lapse guarantee.
Universal life policies are a great tool in the toolbox for financial planning if used correctly. They are flexible, dependable, and readily available.
For more information from Steven on how to buy life insurance and annuities, visit our Annuities site. Or if your looking for best life insurance you can visit our insurance site! You can also visit our Retirement site to learn about retirement plans.Feel free to check out our Insurance blog too!
The idea is to allow the cash value in the account to increase faster than the increase in premium cost. This will allow for either reduced premiums as the cash value grows or for premiums to become unnecessary after a fixed period of time. In the case of a single premium universal life policy, there is a one-time premium payment at the inception of the policy. The policy remains in effect until either the insured dies or the cash value of the policy is depleted by the cost of insurance.
Universal life policies should not be looked at primarily as investments vehicles, in fact it is against the law to do so. This is done primarily because of the tax advantages inherent to universal life policies. With a universal life policy, you can borrow against the cash value without incurring tax penalties. There are other tax advantages to universal life policies.
Benefits
Universal life policies have many benefits and can fit a number of needs for estate and financial planning. Some of these needs are obvious, like final expenses and income for dependents. Others are not so obvious, like a company paying for a policy on a CEO. This is a form of a bonus for the CEO, the company can write off the premium as a cost of business and the CEO only need pay income tax on the premium amount.
Companies also use universal life polices as a non-qualified deferred compensation package for personnel. This allows the company to pay for the policy and hold all rights to the cash value, then upon the retirement of the insured pays benefits to them. In the case of the death of the insured the company pays the benefits to the insured’s beneficiaries.
Universal life policies can be used to protect assets from frivolous litigation (in some states) or as collateral to guarantee a loan against the death of the insured/borrower.
Cautions
It is possible for a policy to lapse if payments are not continued on a regular basis. Some policies offer a no lapse guarantee; make sure you understand what is actually guaranteed before making your choice. A withdrawal or loan against the cash value in the policy can also affect the death benefit or possibly cause the policy to lapse, even if there is a no lapse guarantee.
Universal life policies are a great tool in the toolbox for financial planning if used correctly. They are flexible, dependable, and readily available.
For more information from Steven on how to buy life insurance and annuities, visit our Annuities site. Or if your looking for best life insurance you can visit our insurance site! You can also visit our Retirement site to learn about retirement plans.Feel free to check out our Insurance blog too!
How to find First class Whole Life Insurance
Especially with products that are intended to last for the life of the purchaser there is an additional reward for careful selection. Whole life insurance is one of these products. There are some simple things that can be done to ensure that the policy selected is more than adequate for the insured individual.
Shop Around
In most cases the whole life insurance that is available has fixed premiums. In addition there will be a guaranteed minimum death benefit. These factors and many others may vary from policy to policy though. If a lower premium is more important than a high minimum return then the details in the policy you choose should reflect that. Initially when shopping get an idea of what is available. After this stage there will be time to select just the policy and even request the features that are most wanted.
As you look through the policies that are out there, be certain to make a list of the things that are most important. Keep an eye out for features and details that you might not have realized were significant options in whole life policies.
Verify the Insurer
This is a key point when looking for first class insurance. If the insurer is not a quality company there is less chance that the policies purchased from them are going to be first class.
There are three important ways that the quality of an insurance company can be verified. The first way is to look at reviews of the company. One of the most common reviews of insurance is the AM Best rating. These grades are given to insurance companies based on the quality and stability of their company. Assessments like these can help to determine if the company will be around to serve you throughout the life of your policy. Beyond these the Better Business Bureau actually has information regarding the service-side of several insurance companies. This can be a real asset in determining what sort of service the company is known for.
In addition to ratings be certain to read a number of independent reviews. These can often supply information about a policy or type of policy that you might have been unaware of. These reviews are sometimes written by professional writers. Others are written by individuals with first-hand experience. They have typically owned the policy that they are writing about at one time or another.
The last method is something that is usually done when there are approximately three prime candidates left. It involves contacting the insurer directly.
Select
Select the top three picks. Now is the time that you should assemble the remaining list of questions. When doing this consider the lifestyle of the individual being insured. Do they travel? Are they into extreme sports? What age are they? These and other questions will help you to get the information needed to determine which policy is best for them. If none of the standard policy options suit your needs, state what you want. In a number of cases the agent will be able to work with you. Be certain to assess the service that you receive as well.
A whole life policy is a business arrangement that is made to last a lifetime.
For more information from Steven on how to buy life insurance and annuities, visit our Annuities site. Or if your looking for best life insurance you can visit our insurance site! You can also visit our Retirement site to learn about retirement plans. Feel free to check out our Insurance blog too!
Shop Around
In most cases the whole life insurance that is available has fixed premiums. In addition there will be a guaranteed minimum death benefit. These factors and many others may vary from policy to policy though. If a lower premium is more important than a high minimum return then the details in the policy you choose should reflect that. Initially when shopping get an idea of what is available. After this stage there will be time to select just the policy and even request the features that are most wanted.
As you look through the policies that are out there, be certain to make a list of the things that are most important. Keep an eye out for features and details that you might not have realized were significant options in whole life policies.
Verify the Insurer
This is a key point when looking for first class insurance. If the insurer is not a quality company there is less chance that the policies purchased from them are going to be first class.
There are three important ways that the quality of an insurance company can be verified. The first way is to look at reviews of the company. One of the most common reviews of insurance is the AM Best rating. These grades are given to insurance companies based on the quality and stability of their company. Assessments like these can help to determine if the company will be around to serve you throughout the life of your policy. Beyond these the Better Business Bureau actually has information regarding the service-side of several insurance companies. This can be a real asset in determining what sort of service the company is known for.
In addition to ratings be certain to read a number of independent reviews. These can often supply information about a policy or type of policy that you might have been unaware of. These reviews are sometimes written by professional writers. Others are written by individuals with first-hand experience. They have typically owned the policy that they are writing about at one time or another.
The last method is something that is usually done when there are approximately three prime candidates left. It involves contacting the insurer directly.
Select
Select the top three picks. Now is the time that you should assemble the remaining list of questions. When doing this consider the lifestyle of the individual being insured. Do they travel? Are they into extreme sports? What age are they? These and other questions will help you to get the information needed to determine which policy is best for them. If none of the standard policy options suit your needs, state what you want. In a number of cases the agent will be able to work with you. Be certain to assess the service that you receive as well.
A whole life policy is a business arrangement that is made to last a lifetime.
For more information from Steven on how to buy life insurance and annuities, visit our Annuities site. Or if your looking for best life insurance you can visit our insurance site! You can also visit our Retirement site to learn about retirement plans. Feel free to check out our Insurance blog too!
Whole Life Insurance Reviews
Saving time when shopping is one way to ensure greater efficiency. There is an easy way to get an idea about products before you purchase them. Utilizing whole life insurance reviews can help to speed up the process of choosing insurance. It may also help to ensure that the policy chosen is one that works for you. It is important to temper the reception of these reviews. Below are some tips on what to look for in a review and other notes regarding reviews.
Who Wrote This
One of the things that many may consider when reading a review is “who wrote this”. To some degree that is a significant question. In fact, insurance companies themselves may have individuals write brief reviews of their policies. These reviews typically do not take the form of testimonials. Instead they simply describe the policy. This description may include many of the prominent features, but it will not likely list the drawbacks of the policy.
Another common writer of reviews is the independent writer. Often these reviews are intended to present objective reporting on the policy. There may be descriptions regarding the positive and negative highlights of the policy. These reviews are less commonly found in the form of a testimonial than in the form of a report.
Finally, the individual that has been there and experienced ownership of the policy is the last of the writers usually found. These individuals may be extreme in their perception of the insurance company and / or the policy. These reviews can prove beneficial when assessing the experience that you may have though.
What to Look For
First look for the details that you are interested in. In some cases these may include the premium that is paid. In other cases the rate of return may be an important consideration. Understanding the typical premium and return on whole life insurance can provide a good comparison point. It is also a good idea to look at sections regarding positives and negatives. Even in cases when the policy has been reviewed, these sections may present things that you have not considered.
Look for objectivity. If the review is all one-sided for instance then the information that is in the review may not be reliable. Similarly if the information is too vague then you will need to seek other sources to get the information that is wanted. Do not assume that any single review contains all the information about a policy. Also, do not assume that all the information in a review will be accurate in your experience, if you choose that policy.
Diversify
Be certain that there are an adequate number of sources involved. Sometimes, when reading reviews, you may be presented with a site that has a number of reviews on whole life insurance. Do not settle on reading reviews from a single site. Seek out alternate sites. Likewise, search for reviews that come from different types of sources. If it is possible, read a review from one of each type of sources listed here.
For more information from Steven on how to buy life insurance and annuities, visit our Annuities site. Or if your looking for best life insurance you can visit our insurance site! You can also visit our Retirement site to learn about retirement plans. Feel free to check out our Insurance blog too!
Who Wrote This
One of the things that many may consider when reading a review is “who wrote this”. To some degree that is a significant question. In fact, insurance companies themselves may have individuals write brief reviews of their policies. These reviews typically do not take the form of testimonials. Instead they simply describe the policy. This description may include many of the prominent features, but it will not likely list the drawbacks of the policy.
Another common writer of reviews is the independent writer. Often these reviews are intended to present objective reporting on the policy. There may be descriptions regarding the positive and negative highlights of the policy. These reviews are less commonly found in the form of a testimonial than in the form of a report.
Finally, the individual that has been there and experienced ownership of the policy is the last of the writers usually found. These individuals may be extreme in their perception of the insurance company and / or the policy. These reviews can prove beneficial when assessing the experience that you may have though.
What to Look For
First look for the details that you are interested in. In some cases these may include the premium that is paid. In other cases the rate of return may be an important consideration. Understanding the typical premium and return on whole life insurance can provide a good comparison point. It is also a good idea to look at sections regarding positives and negatives. Even in cases when the policy has been reviewed, these sections may present things that you have not considered.
Look for objectivity. If the review is all one-sided for instance then the information that is in the review may not be reliable. Similarly if the information is too vague then you will need to seek other sources to get the information that is wanted. Do not assume that any single review contains all the information about a policy. Also, do not assume that all the information in a review will be accurate in your experience, if you choose that policy.
Diversify
Be certain that there are an adequate number of sources involved. Sometimes, when reading reviews, you may be presented with a site that has a number of reviews on whole life insurance. Do not settle on reading reviews from a single site. Seek out alternate sites. Likewise, search for reviews that come from different types of sources. If it is possible, read a review from one of each type of sources listed here.
For more information from Steven on how to buy life insurance and annuities, visit our Annuities site. Or if your looking for best life insurance you can visit our insurance site! You can also visit our Retirement site to learn about retirement plans. Feel free to check out our Insurance blog too!
Who Should Buy Whole Life Insurance
Whole life insurance is a type of policy that can provide insurance for a lifetime. It offers the policy holder fixed premiums for the entire time that the policy is active. Among the other features that attract some are the cash value attribute and the value growth attribute. Both of these present the opportunity for the policy holder to increase the benefit by paying in more premiums. If these features interest you, then a whole life policy may be a good option. Below are more details about who may benefit most from these policies.
You
The simplest way to get the most out of a whole life policy is to start young. This is based on two aspects that are common to most of these policies. The first aspect is the fixed premium. In general, the younger the individual is the lower the expected life insurance premium. There is likely to be a limit to this savings though. A low premium can usually be expected around the twenties or the thirties. There may be some exceptions to this. By beginning a policy around that time the premium that is secured could be paid even when the insured individual is eighty.
Similarly, because these policies have cash value and value growth features beginning early provides the most time for the money to grow. This is based on a policy having some minimum value payout. The policy will contain the details regard growth rate and other considerations.
Investment
There are mathematical considerations that may make a whole life policy less effective at building wealth though. Individuals that are able to invest their money and earn a high yield consistently over the course of their lives may not want a whole life insurance policy. Simply put, the insurance and cash value features coupled in a whole life policy result in a more expensive policy. Some of the money paid goes to fees and other costs. As a result, the amount that is placed into cash value and the growth provided may not measure up to the returns that are achieved by some that invest the same amount. Individuals that do not, or cannot, invest for themselves may appreciate the two-in-one nature of whole life.
There are some simple calculations that can be made to determine which the best option is. Verify the minimum payout on the whole life policy in question. Then compare that number to the returns estimated by investing the amount that you would pay into whole life minus the cost of the life insurance you choose in place of whole life.
Moreover
It is nearly invariably the individuals that plan to maintain insurance throughout their lives that stand to benefit most from whole life. In addition, the individuals that are planning a consistent life will be most likely to get the most out of whole life. It is a lifelong policy with definite benefits and added bonuses in many cases. If these are not the features that interest you, then whole life insurance may not be the best choice. For those that are interested in the cash value and the value growth features but prefer more variability, universal life may be more appealing.
For more information from Steven on how to buy life insurance and annuities, visit our Annuities site. Or if your looking for best life insurance you can visit our insurance site! You can also visit our Retirement site to learn about retirement plans. Feel free to check out our Insurance blog too!
You
The simplest way to get the most out of a whole life policy is to start young. This is based on two aspects that are common to most of these policies. The first aspect is the fixed premium. In general, the younger the individual is the lower the expected life insurance premium. There is likely to be a limit to this savings though. A low premium can usually be expected around the twenties or the thirties. There may be some exceptions to this. By beginning a policy around that time the premium that is secured could be paid even when the insured individual is eighty.
Similarly, because these policies have cash value and value growth features beginning early provides the most time for the money to grow. This is based on a policy having some minimum value payout. The policy will contain the details regard growth rate and other considerations.
Investment
There are mathematical considerations that may make a whole life policy less effective at building wealth though. Individuals that are able to invest their money and earn a high yield consistently over the course of their lives may not want a whole life insurance policy. Simply put, the insurance and cash value features coupled in a whole life policy result in a more expensive policy. Some of the money paid goes to fees and other costs. As a result, the amount that is placed into cash value and the growth provided may not measure up to the returns that are achieved by some that invest the same amount. Individuals that do not, or cannot, invest for themselves may appreciate the two-in-one nature of whole life.
There are some simple calculations that can be made to determine which the best option is. Verify the minimum payout on the whole life policy in question. Then compare that number to the returns estimated by investing the amount that you would pay into whole life minus the cost of the life insurance you choose in place of whole life.
Moreover
It is nearly invariably the individuals that plan to maintain insurance throughout their lives that stand to benefit most from whole life. In addition, the individuals that are planning a consistent life will be most likely to get the most out of whole life. It is a lifelong policy with definite benefits and added bonuses in many cases. If these are not the features that interest you, then whole life insurance may not be the best choice. For those that are interested in the cash value and the value growth features but prefer more variability, universal life may be more appealing.
For more information from Steven on how to buy life insurance and annuities, visit our Annuities site. Or if your looking for best life insurance you can visit our insurance site! You can also visit our Retirement site to learn about retirement plans. Feel free to check out our Insurance blog too!