When it comes to planning for the future, several options are available. Retirement savings, investment accounts, and real property to be divided among beneficiaries are only a few of the possibilities. Life insurance also enters the mix with a few alternatives existing in this category as well. Three main types of life insurance have been developed for those looking to take care of their final expenses and their families: term, whole life, and universal life. Though each has its benefits, the latter offers a certain amount of extra flexibility.
Understanding the Basics
Like whole life, Universal Life Insurance in Houston TX is a type of permanent coverage as opposed to the limited death benefit time frame of term life insurance. As is the case with all policies, premiums must be paid. One key difference in universal life is the way premiums are applied. Part of each premium paid goes toward the cost of keeping the policy active while the remainder is used to build cash value.
Looking at the Cash Value Aspect
Portions of premiums allotted to the cash value of a universal life policy act as a savings account. They accumulate over time and grow based on current interest rates and other factors. Should financial hardships arise, the policyholder has a couple of options through Insurance Offices Texas. He or she may use the accrued cash value to continue paying for the policy so it remains active. Alternatively, he or she can withdraw from the cash value to help make ends meet. Unless the policyholder decides to cancel the policy, beneficiaries will still receive a death benefit regardless of withdrawals.
Paying the Premiums
With Universal Life Insurance in Houston TX, policyholders have the freedom, to an extent, to choose their premium amounts and when they’re paid. Restrictions in this regard vary by policy and coverage provider. Coverage amounts can also be raised or lowered as the policyholder sees fit, though additional medical exams may be required beforehand. While premiums are often higher for universal life than those of whole or term coverage, the cash value accrual tends to offset the cost.
Overall, universal life insurance offers a great deal more freedom and versatility than other types of policies. Policyholders can draw from the cash value of their policies should the need arise. In any case, their beneficiaries receive death benefits when the time comes. Visit the website of an insurance agency to learn more.
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