7 Things You Should Know About Universal Life Insurance
Want to learn about Universal Life Insurance? You’ve come to the right place. This article features top 7 things you should know about this type of life insurance policy. Read on!
There are many life insurances, but if you’re looking for a life insurance policy that is suitable for you and has a lifelong coverage, you should consider the Universal Life Insurance Policy. We’ve taken our time to outline some things you should know about it below. Check them out!
1) What Is Universal Life Insurance?
Universal life insurance is a permanent life insurance that lasts for a lifetime. It has low premiums similar to those of term life insurance and also an Investment savings element.
Most of this kind of life insurance policies contain a manageable premium option. However, some require fixed premiums or a single premium. The smallest amount you are required to pay to keep the policy is the price tag on the insurance policy.
This only allow Beneficiaries to receive death benefit. Unlike term life insurance, Universal Insurance Policy can accumulate cash value.
2) How Universal Life Insurance Works
This type of insurance covers you for lifetime, as long as you pay the premiums. Some form of the insurance also offer a cash value component. The cash value they offer can sometimes build up investments gains or losses, depending on the policy type.
Interestingly, you can take some amount of money out of your cash value through withdrawal or loan. But the money will be deducted before they pay your beneficiary if you pass away.
3) Companies That Offers Universal Life Insurance In Canada
Not all life insurance companies offers this type of insurance in Canada. However, the few companies that offers it are mentioned below
- Sun Life
- Great-west Life
- Canada Life
4) Types Of Universal Life Policies
There are three main types of life insurance policies and it is important to understand them. Although, their costs and features are different.
- Guaranteed Universal Life
- Indexed Universal Life
- Variable Universal Life
Guaranteed Universal Life: This insurance policy offers a death benefit and premium payment that does not change with time, before buying the policy, you select an age the policy will end (e.g 90, 100, 110, 120) the higher the age, the increase in premium.
Indexed Universal Life: This insurance policy has some flexibilities with death benefit and premium, meaning you may be able to adjust your death benefits over time when your budget changes. It also lasts for a lifetime.
Variable Universal Life: This insurance policy allows you to change death benefit and premium within limits, you’ll select a sub-account for your cash value investments and as such it will need an active managing.
5) How To Take Money From Your Cash Value
You can take money from your cash value using any of the following option:
- Withdraw funds option from your cash value
- Borrow against your policy option
- Surrender your policy option
6) Medical Exams For Universal Life
Many companies that offers this life insurance take their time to do a life insurance medical exam. This exam includes your height, weight, blood pressure, urine sample etc.
7) Does Universal Life Insurance Policy Have Downsides?
The only downsides to this policy is the tax on cash withdrawals, interest is charged on loans. And it is important to pay attention to your premiums as the years goes by.
You should consider Universal Life Insurance if you want a policy that will last for the duration of your life. However if you think this type of life insurance is too expensive for you, you can check out other types of life insurances in the recommended articles below.
- Top 10 Home Insurance Companies In Canada
- Top 10 Car Insurance Companies In Canada
- Costco Insurance: Everything You Need To Know
- Aviva Auto Insurance (Online And Multi Car Insurance): Everything You Should Know
- PetPlan Insurance Review: Everything You Need To Know
- Co-operators Group Insurance: Everything You Need To Know
- Cheap Car Insurance: Best Companies In Canada And United States
- Top 20 Best Insurance Companies In Canada
- Top 10 Things You Should Know About Canada Life
- Top 10 Canada Life Insurance Companies
- Sun Life Canada: Life And Health Insurance Review