Another type of permanent life insurance is the universal life insurance. Universal life insurance quotes are also more flexible compared to whole life insurance quotes because it allows the policy owner to modify the policy face rate or premium stated on the original quote, depending on changing needs and circumstances. Universal life insurance quotes give you the chance to regulate your insurance coverage in keeping with your current condition. Unlike whole life insurance quotes, universal quotes specifically separates and identifies the mortality, expense, and cash value parts of a policy.
A Cash Value Life Insurance
Universal life insurance is a type of cash value life insurance, a life insurance policy which in addition to benefits upon the death of the policy owner, also accumulates cash value over time.
Many universal life quotes have several different provisions by which the accumulated cash value insurance rate can be made available to a policy owner during life, without causing the policy to lapse. You can reduce or increase your death benefit and pay your premium rate at any time and in any amount after your first premium payment has been made. When it comes to the death benefit, you have two options: a fixed rate of death benefit or an increasing death benefit equal to the face value of your policy, plus your cash value amount.
Changing Universal Life Insurance Rate
You also have the opportunity to change the rate and frequency of premium payments stated in the quotes. You can increase your premiums or may also even pay in lump sum according to the specified limit in the quotes. Part of your premium minus the cost of insurance is put into an investment account and the interest therein is credited to your account. In this way, the interest rate grows on a tax-deferred basis, which increases your cash value.
Another good thing about universal life is that your insurance company discloses the entire cost of quote to you, giving you an idea on how your policy works.
The downside of a universal life is the universal life insurance rate. If the policy performs well, there are chances of potential growth in cash savings fund. But bad performance of your policy means the estimated returns are not earned. Hence, you end up paying higher premiums to get your cash value account going.