Term Life Insurance Q&A
- Why should I choose BeyondQuotes?
- Which companies do we represent?
- Is BeyondQuotes licensed where I live?
- Is my information confidential?
- Do you only offer rate quotes?
- How do we choose which companies to represent?
- How much Term Life Insurance do I need?
- What are "level" policies?
- What should be the term length?
- Is it worth insuring my spouse on my policy?
- Can you explain the difference between Term and Whole Life plans?
- I suffer form a pre-existing condition. Can I still be insured?
Applying for a Policy
- How do I apply for Term Life Insurance?
- How do I find the best value plan for my needs?
- What is the waiting period between applying and coverage?
Universal Life Insurance
Universal Health Insurance Explained
Universal life insurance is a relatively new and very popular life insurance option. It takes all the advantage of a whole life insurance policy and a term life insurance policy.
With universal life insurance you combine the security of term insurance with the flexibility of whole life insurance. Before deciding to purchase universal life insurance it is important to understand the difference between whole life insurance and term life insurance.
Term life insurance is the least expensive option of the 3 most popular types. With a term policy you purchase a policy at an agreed upon price for an agreed upon amount of time. Your premiums do not change and your benefit does not change. This type of life insurance is a good choice for those who need insurance for a limited amount of time. Most employers offer term life insurance as part of their benefit package they offer to their employees.
Whole life insurance is more expensive than term life insurance, but it gives you many more options on how you pay your premiums. Whole life insurance offers you an investment option that is not available with term life insurance. Best of all, your premiums are tax exempt. You don't have to pay taxes on your premiums because they are considered an investment. You don't pay taxes on your money until you take money out. Another advantage of whole life insurance is that you can borrow against the cash value of your policy. You do have to pay taxes, but in an emergency it is nice to know that you have some type of emergency fund.
Universal life insurance offers you the best of both worlds. You have the security of term life insurance in that your premiums will never change. You also have the investment option of a whole life insurance policy. The cost of a universal life insurance policy is somewhere in the middle.
As with any investment opportunity there is risk involved with universal life insurance. The cash value of your policy will fluctuate with the financial markets, which means there is a possibility that your policy will actually decrease in value over time. The markets have always made money over a long period of time, therefore universal life insurance is best for those who younger or plan to live a long life.
If you do borrow against your policy you are usually required to pay a fee for the convenience. So, unless you are truly having a financial emergency, it is best to let your cash value accrue without touching the cash portion of your policy. So, always know the terms of your universal life insurance policy before making any changes or take out any money.
Still another benefit of a universal life insurance is the ability to use your accumulation of funds from your cash portion to lower your premiums. Be aware however, that if your policy is losing money your premiums will go up to cover any losses. So, the universal life insurance policy does present some risk to the policy holder. But, if you use your universal life insurance policy as an investment strategy or a tax shelter.
Before you make any decision about any kind of life insurance it is wise to explore all your options. To do that you must educate yourself on all the ins and outs of the entire life insurance industry. To make the best decision you have to do your research. Explore all avenues of information that you can find.
Before you make your decision, there are many people who will give you the details of all different kinds of policies for all different types of situations. The internet is a good place to start. There are, however, many pitfalls to the internet. Make sure that you don't fall prey to the traps that are plentiful on the web. Look for information, but it is not usually a great idea to buy an insurance policy unless you know that you are getting your policy from a reputable provider.
Life insurance agents are also a great source of information to help you understand the details of a universal life insurance policy. Find one you can trust and you can find a comfortable life insurance policy.