- Universal Life Insurance -
Universal Life Insurance (also called “Flexible Premium Adjustable Life Insurance”) is similar to Whole Life Insurance in that it is a permanent life insurance policy based on a cash value. It is a very flexible form of life insurance because it allows the owner of the policy to vary the amount of the premiums, the timing of their premiums, and change the policy’s overall death benefit.
With Universal life insurance, a portion of the policy premium goes to the life insurance component that provides the death benefit and the excess is invested into fixed-income and interest-bearing instruments. With the other form of universal life insurance, Universal Variable Insurance, which is a policy where the death benefit and the cash value fluctuate in response to the overall performance of underlying investments. The main difference between universal and universal variable life insurance, is that with universal variable, the policy holder gets to choose the investments and the investment amount.
The universal life insurance options are more flexible than any other options available; they are also considered a good choice because they combine the protection features of Term Life Insurance and the investment features of Whole Life Insurance. The portion of funds allocated to the investment features of a universal life policy, are invested into a tax-deferred account that typically earns interest at rates comparable to prevailing money market interest rates. Universal life insurance normally guarantees a minimum interest rate of around 4%. This means that with a universal life policy you are guaranteed a minimum return on your money, no matter how the investments perform.
Recap – Universal Life give you the flexibility to adjust your death benefits as your personal needs change. With universal life, you also have the flexibility to pay lower or higher premiums as your financial situations fluctuate. Be aware that if your premium payments are too low for too long, your policy could lapse, and you might be without insurance protection.
- Call Hicks Insurance -
(281)812-1876
Hicks Insurance – Humble, Texas – Life – Term Life – Whole Life – Universal Life