Sunday, 25 December 2011

Life Insurance - What is Universal Life Insurance?

Many people are between the benefits and life insurance, whole life insurance provides intelligent. Enjoy the accessibility of imprisonment. They also love its flexibility. Temporary be canceled without significant penalty life insurance, and news began several different death benefits and higher amounts.

On the other hand, life offers something for protection against the risks non-life to death. The policy does not expire after a number of years, because the concept of life, so that consumers do not have to new reports. As a result, the cover can not be denied that in the future due to age or illness. Premiums will not increase. Because of these guarantees, but life is not flexible. The death benefit and the premium is determined at the time of signing the contract.

The solution for many people is a universal life insurance. Universal life has been described as a hybrid between the life and words of life, but this is a misnomer. Universal life insurance is a type of insurance for life. This allows greater flexibility and lower costs for traditional life, but shares characteristics of life: continuous coverage, premiums do not change for reasons of age or health, and the accumulation of value redemption.

The main difference between the life and words of life is the life of the hedge. With Standard Life insurance coverage is limited at a certain period of the term. At some point, either the coverage expires or insured. If the insured dies during the term, the death benefit paid to the beneficiary. If the insured survives the term coverage will cease at the end date of the policy. Some term life be renewed without physical examination, but premiums increase with age of the insured at the time of renewal. With a lifetime to continue indefinitely until the insured dies coverage. Universal life insurance shares this property with life insurance. Both are permanent life insurance forms.

A person can cover a number of life insurance policies for eighty or ninety. If an individual term life insurance is renewed or a new request, but the cost of insurance increases, due to increased mortality in the elderly. For example, for a 30-year term insurance for one 20 $ 500 000 years to life for only $ 245 per year, assuming he is healthy, do not smoke, do not participate in sports or extreme activities leisure and travel in dangerous areas of the world. However, serve a 60-year-old health and in similar circumstances, other criteria must always be at least U.S. $ 2,525 per year for the same 20 years $ 500,000 policies. At age 70, $ 10.680 per year will pay for the same policy. If a person develops health problems during the time that the expression of the life insurance premiums do not change. If the person does not have a term life insurance "renewable", then when the time and the person who made the request for term life insurance coverage, increase premiums significantly. If the person has developed or has suffered serious health problems such as cancer or a heart attack, he or she may not be insurable at all.

Not to increase the cost of the permanent life insurance policy over time or changes in health care. Coverage can not be completed, no matter what health problems have insured. Guaranteed insurability is the highest cost of permanent life insurance.

Another important difference between term life insurance and whole life insurance is that life offers saving features, while life is not the end. Term life insurance is "pure". It insured against death, and that's all. Life also insured against death, but also provides a mechanism for the accumulation of cash value or savings. Universal Life also offers saving features.

Early in the life of a whole life or universal life insurance, the cost of insurance against premature death is much less than the amount of the premium. Fewer benefits and rights of society - in a tax-advantaged savings account, the insurance company to file the excess. This amount is known as "cash value." These funds are invested by the insurance company. Investment income is credited to the account, which increases the current value. These funds are available to the insured in the form of a loan or withdrawal. If the insured cancels the contract, you will get the value of the money that the policy of "cash value."

Universal through the difference in the degree of flexibility of the life insurance policy should make adjustments. With whole life, the death benefit is determined premium and the value of the accumulation of cash at the outset. With universal life, the insured has the option to increase or decrease the amount of the premium (within certain limits) and increase or decrease the death benefit. For example, the policyholder can reduce premiums if the starting price priceless. If the insured wishes to accumulate or increase the death benefit plus the cash value, he or she may pay a higher premium.

With life, the rate of accumulation of cash value is guaranteed. With universal life, the accumulation of cash value of the investment performance of the insurance company is determined. If the investments perform well, the cash value grows faster than it would with a whole life policy. If successful investment is the present value to grow slowly or not at all. Due to the increase in life insurance, which is cheaper than the traditional risk life insurance.

Many consumers who want life guaranteed insurability, but they are afraid, taken at fixed premiums and death benefits, which are the energy of universal life force is an ideal form of permanent life insurance.


An award-winning author of books for young adults, Bradley Steffens is a regular contributor to print and online publications, including the Discovery Channel magazine, transport and magazines broker agent. A journalist of 25 years experience in creating web content and blogs for aquaponics consultants, nurseries and independent health, life insurance agents and owners. His most recent book, Ibn al-Haytham: First Scientist, the first biography of the world of medieval Muslim scholar known in the West as Alhazen ....

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