Essentials of a Universal Life Insurance Plan

These days, buying an insurance policy has become a challenging task

due to there being a variety of options, all promising a distinct set of

pros and cons. As a result, those looking to buy an insurance need to

put in extra efforts to gather as much knowledge as they can about

the options on hand. Explained here are certain constituents of

Universal Life Insurance Plan - undoubtedly one of the most preferred

types of insurance.

Premium

This is the regular amount to be paid that goes into covering the

amount received at the event of the policyholder’s death and for

miscellaneous costs accrued during the tenure of the policy. The edge

that Universal policyholders have over other policies, such as whole

life policyholder, is that policy holders can fix the amount and the

frequency of the premiums to be paid; however, the alteration needs

to be in compliance with a range specified at the time of signing of the

contract.

The premiums are usually higher for this type of insurance as the extra

amount is invested in the market as securities, long-term debentures,

mutual funds etc. The income thus earned from the market generates

a cash or liquidity value that is over and above the death benefit to be

received. The funds are deposited in an investment account.

Death Benefit

Universal life policyholders are provided with a lot of options when it

comes to death benefits. Firstly, they can create a combination of the

plans and details of death benefit corresponding to their own needs

and goals. Even during the life of the policy, the conditions can be

changed as per the circumstances.

For example, if a holder fails to pay the premium during a prolonged

period of time, the amount to be received at the time of death may be

lowered proportionately. On the other hand, if the investments made

on the extra premium amounts are generating good returns, then the

death benefit can increase corresponding to the growth of the cash

value.

Cash Value

This plan offers several combinations of investment bundles and the

holder can choose a portfolio that works for their best interests which

can be changed during the tenure of the policy as well.

However, the interest rates offered are generally lower than the

returns earned by directly investing in the market as it has to

compensate for the risk security provided to the policy holder.

Tax Savings

Another gain that the policyholders receive in this case is the fact that

they can take up a loan or withdraw against the accrued cash value of

the policy. The loan or the withdrawal done in such a case is tax-

deferred.

This is one of the major reasons why universal life insurance plan is

such a preferred option for corporates to get their businesses secured.

Find out which life insurance policy is best for you and save on life

insurance with rates from below given life insurance companies:

Universal Life Hong Kong & China: http://universallife.com.hk/

Universal Life Indonesia: http://universallife.co.id/