Universal Life Insurance Planning For Your Future

Life can be an amazing experience at times. There are some instances where everything may be just fine and then our life can be on death’s door. It is important that everyone has some type of life insurance to protect their family members and loved ones in the event of a sudden or unexpected death. There are a number of life insurance options to choose from including Term Life, Whole Life and Universal Life insurance.

Universal Life insurance is a particular type of life insurance under which an individual is covered for their entire life. Any premium payments that are made by the insured party above and beyond the requirement are added to the cash balance. Typically, an insured party will make an insurance premium payment. The amount will then be credited to their Universal Life insurance policy. However, there will be fees that are deducted from the policy. Administration fees and other fees that are written within the policy will be deducted from the balance each month.

These fees are typically a very small amount and are meant to pay the staff, which runs the policy as well as for claims and customer support.

One of the numerous advantages to owning a Universal Life insurance policy is that it can be used to pay off debt. All Universal Life policies have a cash surrender value. This is the value of the policy if it were to be terminated and a cash benefit paid out to the beneficiary at the present time. Some individuals purchase a Universal Life policy with the idea of saving money. While it is not meant to be a savings account, a Universal Life policy could be used to store money should an individual need to access it at a later date. There are three main types of Universal Life policies: single, fixed and flexible.

Single premium polices used to be more common. They typically involved placing a single large premium into the policy. This was very similar to placing a large amount of money into a bank that was not taxed or subject to any scrutiny. Federal legislators changed the law to ensure that this type of policy was not abused by the wealthy.

Fixed premium policies are where the same amount is paid each and every premium payment until the death benefit is reached. There may be some premium payment periods that are short, while some may be for the length of the policy. It is written differently in each and every policy. These policies are considered to be higher risk due to the fact that they require a certain amount of interest to accrue from the paid premiums. During periods of high interest, there may be problems with the policy. An individual may have to pay more in order to still have the same amount of death benefit.

Flexible premium policies are useful for individuals who want to keep their options open. Payments can be varied in time and amount based upon the policy requirements and the owners choice. There is typically a choice for the level of a death benefit in dollars and an amount of risk, which an individual is willing to take. These types of policies are useful for younger individuals as well as those who follow their insurance accounts closely.

The Importance of Having One of the Over-50 Life Insurance Plans

Choosing the right insurance policy takes time. The face value of the policy should be enough to replace the income that you would have earned if you lived a full life, as long as you can afford the premiums payable. The insurance will be in a position to replace the after-tax income that you did not have the opportunity to earn by being alive and working. The right cover allows your loved ones to continue living their lives, even when your income is no longer available. Therefore, the coverage you choose to purchase should be dependent upon your present, future income, the budget for premiums and special circumstances affecting the family. The over-50 life insurance is important because:

· It offers independence

It is good to have a company-sponsored life insurance cover. However, independence is generated from purchasing your own policy. This ensures your family is properly covered even when you become unemployed or change jobs. The fact that you purchased the policy makes it possible for you to be in control of the policy.

· Leave a legacy

Purchasing the right policy helps to protect the future of your loved ones who may include your spouse, parents or children. By purchasing insurance you get an opportunity to leave a legacy of your life. Therefore, an insurance cover should be purchased out of love for your family.

· Offers comfort

Insurance plays an important role in comforting loved ones during the difficult time of grief. They do not have to bear the burden of catering for huge medical bills, funeral and burial cost at a time when they are dealing with the loss of a loved one.

· Provides a peace of mind

The right policy will be able to cater for the financial needs of the family during uncertain financial times. Furthermore, the right cover offers you an assurance that the financial needs of the loved ones are properly taken care off. Therefore, a cover that caters for final expenses and daily up keep can offer the desired peace of mind.

· Provide for child/elder care

In the event that one of the spouses dies or the caregiver leaves, the right policy will be in a position to cater for child/elder care. The need will arise to hire the services of a domestic worker to perform various tasks such as helping with schoolwork, cleaning the house, laundry, cooking and taking the children to the doctor.

Did You Know Existing Mortgages Can Help You in Finding Cheap Decreasing Term Life Insurance Plans?

In life insurance, decreasing term life insurance is one of the foremost types. When a person opts for this form of insurance, the death benefit also decreases in equal proportions.

Suppose you have selected policy for five years, paying $10,000 in the first year and decrease every year by $2,000. At the end of policy term, effectively speaking – zero will be your face value and also the coverage expires. Usually, decreasing policy premiums remain same throughout the period. Such insurances are mainly meant to cover mortgage.

If you have certain amount of mortgage and you take decreasing term life insurance policy, you will pay low premiums. Your beneficiaries will receive the money that covers the mortgage, if you die before the term. This applies whenever your policies remain constant for the term period, but the cash benefits that you have to avail from your policy will decrease every year. It is basically well suited for home mortgages.

Such insurance policies allow the owners to exchange current coverage that he or she has with cash value of the policy. Once the policy is exchanged, the death benefit that your beneficiaries get cannot exceed 80 percent of the coverage amount. All the benefits that you get from the normal policy cannot be availed and if you convert a normal policy into decreasing term life insurance, then the beneficiary loses 1/5 of the existing coverage.

The sum assured will get reduced every month and will finally become zero at the expiration of the policy period. Normally, decreasing term policies are opted to cover any loan or mortgage. It ensures that the cover amount is personalized to just cover any loan. And, there are several other benefits of this form of insurance.