Universal Life Insurance Cortland NY
Even though you know that you need life insurance, this can be a complicated subject because of the different types of life insurance policies, the different methods of getting life insurance, and the different benefits that come with each of the policies. Therefore, understanding what universal life insurance is can be one of the most important things that you do.
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Universal life insurance is a permanent life insurance, which is based upon a value calculated in cash. This means that the policy is maintained and established with the person who is getting the policy. The policy comes with a certain amount of money already attached to it, and therefore there are fees that are paid for this insurance. These fees are paid monthly. However, the thing that sets universal life insurance apart is that if a person was to pay any extra on their policy in any particular month, this money would be credited towards their overall policy. These payments are credited to the cash value of the overall policy each month, and include interest, as well. This means that the amount of the policy can grow according to what a person chooses to pay each month. Also, if a person does not make a payment during any particular month, the payments are deducted from the overall cash value of the life insurance policy. This means that there are no fees for not paying during a particular month - it simply means that the overall amount of the policy will go down.
With universal life insurance, the policyholder is able to determine the amount of the interest that will be credited to the account. They can do this by either making the payments larger or smaller as they see fit, or paying above the minimum amount due. At the time the policy is created, they can also choose the type of policy, linked to a specific interest rate, they would like to take out. Some policies also allow interest rates to be changed due to the financial needs of the policyholder, during the life of the policy. These factors make universal life policies very stable investment options, because only the interest is changed and the cash value of the policy always remains the same.
Variable universal life insurance is a type of life insurance that came from the first universal life insurance policies. Variable universal life Insurance policies work in almost the same way as other policies. A person chooses a particular policy, which has a monthly fee attached to it. Then, they are able to pay that fee, plus anything else they would like to pay. The extra money they pay is included, with interest, in their policies. This can increase the value of their overall insurance policy.
However, with variable universal life insurance policies, it is possible to take the cash value of the policy and move it between different accounts. These accounts work in much the same as a mutual fund will work. This way, the policyholder can pick and choose where their cash goes. They can invest it in regular bank accounts, or put it into stocks or bonds as they see fit. Of course, doing these things might be seen as a gamble because there is always the potential of losing money. There is also the potential of having greater rewards, however, which is why some people prefer to have a variable universal life Insurance policy, which allows them to do whatever they choose with the cash amounts of their policies.
Universal life insurance is very similar in some ways to whole life insurance. In fact, it was mostly developed from it. Universal life insurance is similar to whole life insurance because it covers the entirety of a person's final expenses, as well as includes the money they will need to cover final bills and other debts that are left behind. It is also similar because the policy itself is a fixed amount of money. A person can choose to buy whatever increment of the policy they might want. With both types of policies, a person is free to decide upon the amount of money that they would like to insure themselves for, and, along with that, the monthly payments that they feel comfortable with.
Universal, however, has some advantages to whole life. First, the person who has the universal life insurance policy is able to be flexible with the way that they pay and use their interest payments. This can help the cash value grow much faster than with whole life insurance. There are also several differences between universal life insurance and whole life insurance that must be explored.