Universal Life Insurance

An overview of Universal Life Insurance policy

What is a Universal Life Insurance policy?

The three main kinds of life insurance plans that provide entire coverage are whole life, variable life and universal life plans. Universal life insurance, similar to whole life insurance, is based on cash value. In this case, cash value indicates to the amount of funds you put into the plan over and above your fees and premiums. Universal life insurance policy was launched in the year 1981 in response to an environment of high interest and awareness among consumers of the value of investments that were self-directed, since traditional insurance was unable to compete with interest-rates of short term.

Some characteristics of universal life insurance are as follows:

Account value

Universal life insurance policy's account value is the total of the gross value of the entire investment accounts within the plan. This includes income following deductions for the expenses of the present month.

Cash surrender value

This is the present account value, surrender charges and outstanding loans. Normally, surrender charges are usually dependent upon a multiple of the least premium that is required for the plan. Backend charges are usually greater than frontend charges.

Contributions and Premiums

Premiums are the amounts required to furnish the expenses of insurance charges and additional expenses related to the plan. Deposits are additional amounts which are purely of investment nature.

Options of death benefit

Under a universal life plan, the quantity of death benefit that is payable is dependent upon 1 to 4 various options. These are as follows:

  • Level Death Benefit: Provides level coverage all through the tenure of the plan.
  • Cumulative gross premiums and Level Death Benefit: Death benefit is enhanced by the quantity of every gross deposit to the plan.
  • Indexed, Level Death Benefit: The total quantity of death benefit goes up every year by a calculated percentage.
  • Level Death Benefit and account value: The net quantity of death benefit is equal to the initial face amount and also the gross account value.

Universal life insurance quotes

Universal life insurance quotes give you information on insurance rates, the conditions that are covered, exclusions and advantages of buying a universal life insurance policy. In order to get the quotes you just have to go online and check out the insurance firms that will give you quotes on the web. The only thing you have to do is to fill a form and then submit it. You'll obtain your quotes within a few minutes. The agent who deals with online inquires will give you a call and will most likely see you if you have any questions related to your policy.