One thing is certain! No, not death since we all know this event is certain. The other “certain thing” is, most people don’t understand what a universal life insurance policy is and how they work. Unless you take the time to do your research or make an appointment to see your local Memphis insurance agent, odds are you will never understand how a universal life insurance policy works. Universal life insurance is just one of the many life insurance policies available and determining if this type of policy is what you need requires that you first determine what your long term goals are and if this policy will fit into your goals.
Universal life insurance policies are also know as variable life since the premiums will fluctuate over time. There are advocates of universal life insurance and there are people that believe this type of policy to be the worst possible use of money set aside for life insurance. Whatever your opinions, we are going to cover this type of policy and how it works in an ongoing series of Memphis life insurance and the various types available to Memphis area residents.
Unlike the traditional form of whole life insurance which requires set premiums to be paid over the “whole” life of the policy, universal policies can fluctuate and even use the value in the policy to pay the premiums in the future. Policyholders can also adjust the amount of the death benefit to paid. The benefits that are available through a universal life insurance policy include the flexibility outlined above as well as a growing account value that builds over the life of the policy.
One of the most appealing aspects of this kind of policy is the investments choices that can be made with the policy. Universal or variable life allows the policy holder to choose different investment instruments which part of the monthly premium is invested. These investments reflect possible gains that can be enjoyed over time, especially when the current financial markets are trending upward. However, the policyholder will also suffer losses if the financial markets are contending with a prevailing downward trend. Not unlike a 401k, the universal life insurance policy long term value is derived from market swings.
Arguments can be made that the universal life policy is not an ideal policy for people. However, it can also be argued that some people know very little about investing in the financial markets and have no other way of investing except through life insurance. This is a poor argument it is a position that holds an element of truth. Many people would rather pick peas than take the time to learn and practice sound investment procedures. Universal life allows these people two benefits. One is a death benefit that is paid out to their family when they die and an investment vehicle, however poor suited, that allows them some form of money coming in when they retire. Only by meeting with both your Memphis insurance agent and your financial advisor can you decide if a universal life insurance policy is for you.
The naysayer’s of universal life prefer term life insurance over whole life and universal policies. Their rezoning and the most sound, is the fact that the policyholder receives the maximum amount of death benefit for the least amount of paid premium. Although we will cover term life insurance and it’s benefits in a later article, simply put, term life is the probably the best type of insurance for anyone that is willing to spend a sufficient amount of time planning and setting goals for their financial well-being. People that utilize term life insurance to meet one need: A death benefit paid out in the event of their death to their family to maintain the families lifestyle and meet their expenses.
Memphis life insurance agents offer a wide variety of insurance policies that can fit the needs of anyone under any circumstance. Only by visiting your Memphis insurance agent can you determine what is the best choice of life protection for you and your family.