It can be quite confusing to determine which insurance plan would best for you. Since there are several options available, one finds it difficult to understand which one would be a better option. If you’re looking to find out what universal life plans are, you’re in the right place. We have broken down everything there is for you to know regarding universal life plans.
What Is Universal Life Plans
This type of insurance is also known as permanent life insurance. It consists of a contract between the insurance company and an individual wanting insurance coverage. This contract states that the individual wanting insurance must pay a premium amount set to receive insurance. Universal life insurance is permanent life insurance that includes an investment savings element and low premiums, which are quite similar to term life insurance. Many universal life insurance policies consist of a flexible premium option. However, some universal life insurance plans consist of a single premium or fixed premiums.
How Do Universal Life Plans Work
Universal life insurance ensures to offer more flexibility than whole life insurance. This means the individual purchasing the insurance can adjust their premiums along with their death benefits. All universal life insurance plans consist of two essential components: the cost of insurance and a saving component known as cash value.
This cost of insurance is the minimum amount of a premium payment required to maintain the policy. COI consists of several items rolled together into one payment. The cost of insurance includes the charges for mortality, policy administration, and other expenses associated with keeping the policy active.
Just like a saving account, universal life insurance policy can also accumulate cash value. Therefore, the individual who holds the insurance policy can access a portion of the cash value without impacting the guaranteed death benefit.
Key Factors To Keep In Mind
We understand that insurance policies can be quite confusing. However, we at Generations Insurance have summarized the key factors to keep in mind below:
- Universal life insurance is a type of permanent life insurance that includes an investment savings element along with low premiums
- Universal life insurance requires a minimum amount of premium payment to keep the policy active
- Beneficiaries of the insurance holder only receive the death benefit
- Universal life insurance has the advantage of accumulating cash value
Contact The Best At Generations Insurance For More Help
We at Generations Insurance ensure that each individual looking for insurance finds the right one according to their preference and needs. If you have any concerns or questions regarding universal life insurance, contact our experts today.