Universal life insurance offers a permanent protection life insurance policy that has tax benefits on its investment module. The accumulated values of cash can be used to cater the whole or part of your insurance cost. Universal life insurance enhances protection and security by offering extra source of income to cover for retirement needs, emergencies, or for estate planning.
You choose a mix of investment that suits you best putting into consideration the amount of risk that you feel comfortable with and the circumstances you’re in and financial goals that you have.
Products for permanent life insurance offer universal life insurance. It’s use is intended if you’re looking for an insurance that will cover you for the rest of your life.
There are two distinct key parts that make the Universal life insurance;
- The insurance and the policy’s cost portion
- The investment portion
There are two basic formats of the insurance portion, namely;
- Level for life format
- Increasing every year format
The universal life insurance policy’s investment portion appears same as numerous mutual funds even but cannot be referred to as mutual funds.
Most of the universal life insurance policies investment portion doesn’t behave the same way as mutual funds in other vital aspect. Same way as the traditional mutual funds, there is no typical guarantee for the investment options. Therefore, it means that just like the traditional mutual fund, you’re not guaranteed protection to all the investments integrated in your universal life insurance policy and at any time they can crash and burn.
In 2008 to 2009, several investment options for universal life insurance crashed by 30% to 40% right with the other markets.
You can use a policy for the universal life insurance without having to take advantage of the investment options. This makes the policy be like a term policy i.e. increasing the costs for insurance with no investments or cash options.
Keep in mind that the annual premiums are not necessarily similar to the costs of insurance. Therefore, it means that money there will be no effect when money goes in and out of the investment options. Be clear on the division of your premiums inside the policy. Be able to show the portion that covers investments and the one that covers insurance.
When choosing universal life insurance, you should consider the following;
- You will not be reflecting the real policy when you’re using a conservative interest rate.
- For investment options, TFSA’s and RRSP’s serve the customers better instead of investing inside a policy for universal life insurance.
If you’re in need of a permanent insurance, the Universal life insurance is the ideal choice. Here are features for some recommended universal life insurance policies;
- Costs of insurance that is completely guaranteed
- Level insurance costs (products that have level premiums are not recommendable but those with increasing costs of insurance inside the policy).
- Minimal to no investments. Let your insurance policy act as insurance rather than be an investment.
Click here to learn more why you have to choose universal life insurance.
Features of universal life insurance
- Flexibility – you’re the one to decide on the life insurance amount and how to pay premiums focusing on policy minimums.
- Death benefit – the proceeds for life insurance are usually beneficiary’s tax free income
- Increase in the value of cash is tax-deferred based on the present federal tax law on income.
- Cash value accessibility – you can access the cash value to cater for education expenses, offer supplement for retirement as well as other personal objectives
General uses of the Universal Life Insurance
- Caters for income loss, education expenses and mortgage costs for a family
- You can access the cash value to cater opportunities in life
- Helps in business planning and special needs
Reason to choose universal life insurance
Universal life insurance incorporates coverage for permanent life insurance having a flexible investment options portfolio that is customized to cater for your financial requirements and allied to ease your risk. In these harsh modern times, there are complex laws that make it necessary to fully protect your estate. The universal life insurance will do just that. The plan provides the following;
- Death benefits choice
- A wide investment range
- Death benefits choices
- Riders and Optional benefits
- Flexibility on payment of premiums
- Innovative methods of accessing accumulated value throughout the life of your plan
Universal life insurance policy will assist in giving you the serenity of insurance coverage for lifetime while investing your assets tax well.
If you questions about life insurance, go to http://ourinsurancecanada.com/life-insurance-quotes/