Free Expert Content For Your Website or Blog

If you need expert content for your website or blog, iLeads.com offers free articles on the topic of insurance. To add an article to your website, click the title of the article you are interested in below, highlight and copy content, and paste it in onto your website or blog.

Article Title: Universal Life Insurance: Security with Flexibility

<p>Universal Life Insurance: Security with Flexibility</p> <p>Some people view life insurance as a temporary solution to the insecurities of life. Their goal is to insulate their spouse and children for a certain number of years against the sudden loss of income that accompanies an unexpected, premature death. Once the period has passed—when the children are grown, or example, or the mortgage is paid off—they no longer see a need for life insurance. For these consumers, term life insurance is ideal. It covers the insured for a certain number of years at a low cost, then expires. </p> <p>Other consumers, however, seek a greater level of security. They, too, want to protect the family in the event of a breadwinner’s death, but they not believe coverage should end after a specific period. They worry that unforeseen problems could arise that make life insurance necessary beyond even a 20- or even 30-year term. For example, a spouse may become disabled and unable to support himself or herself. If the breadwinner dies without life insurance, the disabled spouse will be unable to meet expenses, including a mortgage. Sadly, some children become disabled, too. A surviving spouse might not be able to support himself or herself and the disabled child, too. A large number of people divorce, remarry, and start new families later in life—just as a term life policy might be expiring. In each of these situations, a term policy would expire before the need for insurance ends.</p> <p>A person can apply for another <a href="http://www.lifeinsurancewiz.com/" target="_blank">term life insurance </a>policy, of course, but acceptance is not guaranteed, unless the person has “renewable” term life insurance. If the person has gained a large amount of weight or has developed a serious illness such as cancer, heart disease, or diabetes, he or she may not be insurable at an affordable rate, or insurable at all. Even if the person has a renewable policy or is in perfect health in his or her fifties, he or she will pay substantially more than a person 20 or 30 years younger. For example, 55-year-old man will pay a minimum $3,050 a year for a 30-year term policy worth $500,000. At age 30, that same policy costs a man just $395 a year.</p> <p>For many security-minded people, the solution is permanent life insurance, such as <a href="http://www.lifeinsurancewiz.com/">whole life insurance </a>or universal life insurance. Permanent life covers the policyholder until death. Because the insured never has to reapply for life insurance or renew a policy, coverage cannot be denied and premiums cannot be raised, regardless of health or age. Because insurability is guaranteed, permanent life insurance costs much more than term life insurance does at an early age. Later in life, however, the situation is reversed: a new term life policy costs more than an existing permanent life insurance policy.</p> <p>Permanent life insurance also offers policyholders a way to save for the future, while term life does not. Term life insures the life of the policyholder, period. In that sense it is pure life insurance. Permanent life insurance, by contrast, includes savings features. In the first years of the policy, the premium exceeds the cost of insuring a life at that age. The excess amount—minus fees and profits for the insurance company—is deposited in a tax-deferred savings account. The money in this account, know as the cash value, grows with each premium payment. It also grows as the insurance company invests the funds. Once the cash value reaches a certain amount specified by the policy, the policyholder can borrow against funds or in some cases withdraw them. Should the policyholder ever cancel the policy, the cash value will be paid to the policyholder as the “surrender amount.</p> <p>Both whole life insurance and universal <a href="http://www.lifeinsurancewiz.com/" target="_blank">life insurance</a> offer permanent coverage and savings features. The difference between the two is that universal life offers more flexibility, allowing the policyholder to shape the policy to accommodate his or her changing needs. For example, a universal life policyholder can adjust the premium amount upwards or downwards, depending on changes in his or her employment and income. The universal life policyholder also has the option of increasing or decreasing the death benefit. For example, a family’s income often rises through the years, and living expenses increase as the family buys a larger home, children enter college, or other new payments are taken on. The original death benefit of a permanent life insurance policy may no longer be large enough to replace the lost income of the policyholder, in the event that he or she dies. Without adequate coverage, the family would not be able to maintain its lifestyle for any appreciable time. With universal life insurance, the policyholder can increase the size of the death benefit to replace his or her income for a reasonable period—five to seven years. The death benefit can be adjusted downward later, when children have graduated from college, for example. With term life insurance, the premiums and death benefit cannot be changed. They are fixed when the policy is taken out.</p> <p>Another difference between universal life and whole life is that they accumulate cash value different ways, typically at different rates. With whole life, cash value accumulates at a set rate. The rate is low, such as 3 percent, but the growth is guaranteed. With universal life insurance, the rate at which cash value accumulates is tied to the performance of the insurer’s investments. If the investments do well, the cash value accumulates faster than it would in a whole life account. On the other hand, if company’s investments do not perform well, the cash value will accumulate more slowly than that in a whole life account. It may not even grow at all, although some universal policies offer a small guaranteed rate of growth.</p> <p>Consumers who think their insurance needs might extend beyond the period covered by a term life policy and who fear becoming uninsurable later in life often find permanent life insurance a secure solution. Those who want set-it-and-forget-it simplicity may opt for whole life insurance. Those who want to reserve the option to increase or decrease premium amounts or the death benefit find that universal life insurance offers the security and flexibility they need.</p>

Copy Article To Clipboard      

Click on the above button then press "Cntrl + C" to copy the selected text to your clipboard.