Many people come to a point where they feel as if they need life insurance of some type. When you begin to realize a need, it will be up to you to determine what type of life insurance is best. Different stages of life call for more coverage than others. An insurance provider can analyze your lifestyle to determine what you want to accomplish with the death benefit and how much money you will need. Then, with their guidance, you will purchase the coverage you need to keep your family financially secure if something happens to you.
Term Life Compared to Permanent Life
Term life is set for a specific period, and once it has matured, the policy stops. With a permanent life policy, you will pay the premiums as long as you live. Whether you have a permanent life policy in place for a short period of time or decades, the policy will usually pay out the total amount of the death benefit to your family. Many permanent life policies offer a wide array of features ranging from borrowing against the policy to investing in the market and establishing a cash value.
Universal Life Basics
There are two essential parts of a universal life policy. The first is the death benefit that your family will receive once you pass away. The second part of the policy is the cash value element. This acts almost in the same way as a savings account. With each premium you pay, a percentage of that money goes into the cash value account, and it will continue to grow over time. This will also earn some degree of interest. The dividends will also go back into this account if the money is invested.
The cash value part of your policy can be used in case of an emergency with the condition that you pay it back later. However, not doing so can affect your premiums in the future and also reduce the death benefits. In addition, you may need to pay taxes for large withdrawals. Discuss with your insurance provider to understand whether and how much you can withdraw from your cash value.
Do You Actually Require a Universal Life Insurance Plan?
Suppose you want a policy that offers you multiple options for flexibility and being able to adjust certain aspects of your policy as you get older. In that case, you should first look at a universal life policy. This type of policy is most beneficial for individuals with large estates of over $11+ million. It’s also a good idea if you have a special needs family member that will require care long after you are gone. A permanent life policy offers a range of benefits that will serve both you and your loved ones.
If you are unsure what type of life insurance you should purchase, your first step should call our seasoned insurance experts at Randy Jones Insurance Services. We can answer most of your questions regarding universal life insurance necessary for you to make an informed decision. Contact us to schedule an appointment at your earliest convenience to understand your options. Our team can assist you and guide you in the right direction to get the best possible insurance policy.