Universal Life Insurance Death Benefits

One of the main advantages of universal life insurance is that it allows you the flexibility to adjust your premium payments and death benefit to meet your changing needs. For example, if your financial situation improves. Some insurance companies allow you to increase your death benefit by passing a medical exam. You can also decrease your premium payments by lowering the cost of the policy. The premium prices depend on age, health, and lifestyle factors.

 If you pass away with an active policy, your beneficiaries receive only the life insurance payout. They are paid with a single, tax-free payment or can choose monthly or annual payments. The insurance company keeps excess funds. 

Universal Life Insurance Cash Value

In addition to providing coverage for your entire lifetime, universal life insurance also offers tax-deferred cash value growth. The policy earns interest while following the trending money-market rates or if it’s tied to a market index. Market fluctuations may decrease your interest rates.

Insurance companies can protect your policy with a minimum performance guarantee. Any money you put into the policy grows tax-free until you withdraw it, which can be a valuable tool for saving and planning for the future.

Flexibility

Life is unpredictable, and you may go through monetary hardships. Your account carries a cash value that may temporarily help lower your premium and monthly bills. You may borrow against or withdraw in the event of an emergency. However, be aware not to use all of your account’s cash value to pay the premium. Your loan amount isn’t taxable as long as you pay the total amount. Keep your policy with a positive, active cash value, or your coverage may end.

Calculating the cost of Universal Life Insurance

It is essential to calculate costs depending on how reliant your beneficiaries are on your income. In this case, calculating up to 10 times your income and adding your total debt provides a clearer picture. 

Considering the lost income and future expenses that accrue once you’re gone is wise and will help your family cover funding such as college costs and lost income. Consider your investment in the cash value of your policy. Consulting a financial professional to assess your current finances and goals will help you decide how much life insurance you need.

Overall, universal life insurance is a flexible and reliable way to protect your loved ones. In this case, speak with DNS Insurance Broker to better understand the life insurance options available. They will review your personal situation and long-term goals to ensure your beneficiaries are financially secure in the event of your death.