Universal Life Insurance
A particular benefit in buying a universal life policy is that besides accruing tax-deferred savings, premiums may not have to be paid for the full timeframe of the policy. If money to pay the death benefit and other related costs accumulates in the tax-deferred savings portion of the policy, then it may not be required to pay premiums to keep the policy going.
Universal life insurance is a type of permanent life insurance based on a cash value. This means that premium payments above the cost of insurance are credited to the cash value. Every month the cash value is credited with interest, and the policy is debited by a cost of insurance charge, which is drawn from the cash value if no premium is paid that month. The amount of interest credited to the account each month is decided upon by the insurer and is generally tied to a financial index.
The Benefits of Universal Life Insurance
- SECURITY: upon the death of the insured, benefits will be paid to dependents in order to alleviate any potential future financial hardship.
- FLEXIBILITY: the policyholder decides how much life insurance they need at any given time throughout the policy and can adjust the premium paid accordingly.
- TAX-FREE DEATH BENEFIT: under current tax laws governing individual life insurance policies, life insurance proceeds are generally income tax free to the beneficiary.
- TAX-DEFERRED ACCOUNT VALUE GROWTH: interest is earned on the policy at the value of the company's interest rate at any given time during the lifetime of the policy - federal income tax deferred.
Contact a Bryan Insurance Agent today if you need more information about universal life insurance or would like a quote tailored to your specific requirements. You can also look through our life insurance policies to see which one suits you best.