What is a Universal Life Policy?
A Universal Life policy is a form of permanent life insurance. Many see it as a flexible way to help protect your family from potential financial disaster if something were to happen any of the income earners. It also allows you the opportunity to grow an investment that is tax-deferred.
Universal Life policies can offer your family some protection from the unexpected. It provides both flexible premiums and adjustable benefits. As a result, if your needs ever change, so can your coverage.
Additionally, as premiums are paid, a savings component accumulates, which grows tax deferred until the funds are required.
:
- Flexibility – to some extent, you are able to decide the amount of life insurance coverage, benefit and premium payments
- Security – protection from the unexpected loss of an income earner, thereby avoiding financial disaster
- Death Benefit – life insurance proceeds are generally tax-free to the Beneficiary (provided that you used after-tax dollars to pay the premiums, which most people do)
- Guaranteed interest rate – earn while you protect your family - the interest rate at which the account value grows is guaranteed never to drop below a defined level
- Cash value growth is tax deferred – The growth in your cash values is tax-deferred under current federal income tax law - a huge advantage over the long term
Obviously, almost ALL insurance policies are more complicated than what I have listed here, and there are always drawbacks to every type of policy, but as you can see, there are some significant benefits to utilizing a Universal Life policy to help protect your income.
