Universal life insurance policies are similar to that of the term life policy, but also include a savings component. It not only provides a death benefit, but also acts as an investment tool. Unlike term, universal life policies are permanent. They are best for those want or need life insurance well into their golden years. The flexibility of universal life policies are attractive, in that premiums and death benefits can be adjusted as needs change, there are often loan features, as well as tax benefits.
As with any form of life insurance, there are factors used to determine both eligibility and premium costs, including:
• Medical history
• Motor Vehicle History
• Risk Assessment
• Life History
Before deciding on whether a universal life insurance policy is best for you, consider what you need for the following:
• Having enough money to pay for final expenses (i.e. funeral costs)
• Having enough money to cover outstanding debts
• Having enough money to cover children’s education
• Having enough money to compensate for lost income
It is important to be aware, that with universal life policies, the investment component is based on the current interest rates. As the interest rate fluctuates, so does the premium and rate of return on the investment portion of the policy.