Under the terms of the Universal Life Insurance Policy, the excess of premium payments above the current cost of insurance is credited to the cash value of the policy. The cash value is credited each month with interest, and the policy is debited each month by a cost of insurance (COI) charge, as well as any other policy charges and fees which are drawn from the cash value, even if no premium payment is made that month. Interest credited to the account is determined by the insurer, but has a contractual minimum rate (often 2%).
Often people are looking to accumulate large amounts of wealth within their policy. For our clients who are looking to use Universal Life policy for savings or retirement planning we recommend what is known as an Indexed Universal Life (IUL). When an earnings rate is pegged to a financial index such as a stock, bond or other interest rate index, the policy is an “Indexed Universal Life” contract. An IUL policy gives our clients the upside of market gains without the risk of downside market corrections. The other benefit to an Indexed Universal Life plan outside of the death benefit is the ability to take tax-free policy loans. Most of these loans end up being 0% interest after a clearly defined number of years in the contract. Ask any of our current clients and they will assure you that it beats going down to the bank to get a loan for a new car, boat or even college tuition. For more information on IUL visit our page dedicated to that plan at I Need Life Insurance .
Most universal “UL” policies today are designed to accumulate little or no cash value. These types universal life policies offer the advantage of guaranteed level premiums throughout the insured’s lifetime at substantially lower premium cost than an equivalent whole life policy. The advantage of this type of plan gives our clients the flexibility to make decisions about premiums and face amounts down the road. Term Life and Whole Life typically do not offer this type of flexibility once a contract has started.
We here at I Need Life Insurance are confident that this UL/IUL strategy is a great way to tailor fit a plan for an individual or family that gives them what they need when they need it the most. We believe in Life Insurance that benefits you while you are alive and when you are no longer here. We believe in giving you the most sound plan available today for your unique position. The way to make sound decisions is simple. Our core philosophy here is that we want to empower our clients with enough information to make informed decisions about what matters most to them. If you think you would benefit from a conversation with us on universal life policies, contact us today and we will have one of our certified insurance consultants offer you a FREE CONSULTATION to review your insurance needs and see if the UL/IUL plan works best for you. Thank you for visiting us today and we look forward to working with you in the near future to give you the peace of mind we are all looking to obtain.
