Universal life insurance takes care of your beneficiaries financially when you die.
You will build your cash value in the shortest time possible. These overall investment accounts of the company and also tied to bonds which makes it safe for you to take the universal life insurance. You are guaranteed a fixed interest rate that does not change with the changes in the market. The advantage of this policy is that you get to choose how much cash value is to be put in the indexed account. You benefit with the high interest on the cash value if the index futures performs well. You get lower premium rate then the variable universal life because there is no management of the cash value account.
The price of universal life insurance is lower than whole life insurance. Decision-making by the policyholder of universal insurance is less intensive than a whole life insurance policyholder.
The policyholder enjoys flexibility in payment. Fixed premiums are payable at a fixed and regular schedule for a whole life insurance policyholder. You have to pay the same amount at a specific date each month. You decide the time and amount you will pay if you take a universal insurance policy. You can decide to increase your cash value amount paying more premiums. You are allowed to pay premiums using the cash value provided that it exceeds a specific amount. If you are not sure of getting money in the next few months you can pay a lump sum of money so that you do not pay premiums of the following months.
Universal life insurance allows you to change your death benefits depending on their financial needs that you have. You will get a reduction on your premiums when you lower your death benefits. This happens mostly when the person’s income reduces. When your income levels increased you can also increase your death benefits. Increasing your will benefit the beneficiaries more because they’ll have more money to support them after your death.
The lender is not interested in your qualifications as long as you borrow the amount that is lower than the cash value of universal life insurance. You get the advantage of not paying income tax and acquiring a loan at a lower interest rate when you borrow it against universal life insurance policy. You do not need to pay the loan because your cash value will be used to repay the loan if you default. The insurer can make partial payments of your cash value without you canceling the universal life insurance policy. You are not charged tax for withdrawing a portion of your cash value from the universal life insurance.