Thursday, April 26, 2012

Settling For Universal Life Insurance For Customization Purposes

By David Livingston

Universal life insurance is one of the permanent policies that are on top of the preference list of most buyers. It is often perceived as the best as it sort of capable of addressing the disadvantages of the whole life policy. It allows you to customize the plan to your individual needs and financial situations; thus, giving you the confidence that it will all be catered to. That's what makes it a power plan for many.

Both universal and whole insurance have a savings and death benefit component. Both offer tax deferred cash on the savings component. Invariably insurance companies will allot 4-5% of premium amounts to invest in savings schemes of their choice. The usual schemes selected for investment are bonds, mortgages and money markets. The insured person does not have control over where and how the money is invested. He has to trust the discretion of the insurance company for this. Universal life insurance is popular because it offers different flexible payment options.

The death benefit will be secured. No matter what happens with your investment, your beneficiaries would still have it the moment you need to meet your Maker. You ought to religiously pay your premiums regularly though to make it happen. You can also choose to pay your premiums through your cash value if the investments you have are doing well so it would not have to come from your own pocket.

Those who want long term protection for their dependents will choose a permanent plan, like universal insurance. Most insurance companies, banks and credit unions offer this policy to their customers. Here are some of the pros and cons of universal insurance: * Pros o Flexible as death benefit options can be changed o Premium amounts can be small or large depending on financial circumstances o Death benefits are free of tax o Accumulated cash value does not attract income tax * Cons o If premiums are small for a long time, the policy can lapse o Bad investments can result in decrease in cash value o Bad investments will increase premium payments

If you are quite at loss whether or not to take into account the purchasing of universal plan, you may want to buy life insurance quote first. This will be of great help in deciding. This will allow you to weigh the face value of the policy against the total actual amount that you have to pay for the premiums. Of course you ought to consider your unique needs as well. That way, you will have an idea whether or not you should pay attention to it or scratch it off from your short list.

Universal life may be tailored-fit to your needs but it can be very risky too. This is why some people, especially the ones who cannot keep up with the stakes that can be very high, opt to turn to life insurance term life insurance plans. The latter has a number of benefits as well. For one, it asks for cheaper insurance rates. This is because there is no money to be invested in anything. Also, the plan is more straightforward so the plan holders will not have any trouble understanding it. But keep in mind that universal life is more than able to give you lifetime protection if that's what you want.

When you shop online for your insurance needs, you can get instant term life insurance quotes. These quotes are simple to understand and once you fill an online form, you will be immediately given a number of instant quotes from all insurance companies in the place where you reside. This is why all instant online quotes ask for the zip code of your home. Study these quotes and you can soon narrow your choice to the best quotes. Then study them carefully side by side, and you will surely find an excellent deal. Do not make the mistake of going for the first offer. Spend some time in research and comparison before making your choice.

Also, you have to bear in mind that the company you are dealing with must be legitimate. If you were eyeing on universal life insurance, chances are your money is quite big. You cannot afford to lose it to fraudsters. Spot one with the help of the authorities. Verify their legitimacy with the office of the insurance department that is nearest in your neighborhood. Or you can seek help from governing agencies that give insurance firms the appropriate ratings. This way, not only your money will be guaranteed to be safe but the insurance protection of your loved ones as well.

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