Who should own such policies?
Anyone can own a universal life insurance policy. There is no minimum or maximum age in order to get coverage. It is suggested that a person gets a policy as soon as they start to have dependents, including a spouse and/or children. Obtaining coverage at an earlier age can result in more affordable premiums.
What are the benefits?
These types of policies are often tied to interest rates. As interest rates increase or decrease, payments are maintained at the same premium cost. However, it can result in a higher cash value being associated with the policy.
Universal life policies are unlike term policies. They are good for the entire life of a person. There is no term that will expire, rendering a policy useless.
How it Works
A person determines what kind of death benefit that they want to have. This can be anywhere from $10,000 to $1 million or even higher. If you’re considering a life insurance policy, you want to consider what kind of financial impact your death would have on your family. The benefit should be able to take care of the mortgage on a home, any outstanding debts, and potentially college tuition for school-age children.
Once the death benefit is determined, various factors are taken into consideration. These include age, health, and area of the country that one lives in. From there, a policy premium is established, which is paid on a monthly basis for a set number of years. It is possible to pay a lump sum or make payments depending on what a person can afford.