Universal life insurance is often utilized because it has the potential to allow for more flexibility than a whole life insurance policy. With this life insurance option, policyholders are able to adjust their death benefits as well as their premiums; however, there is still a minimum premium payment that is required to ensure the policy remains active. Because the policy is universal, one premium payment is collected and applied to several items that have been rolled together.
Any premiums that have been collected that are in excess of the cost of insurance will be applied to the policy as a cash value. This is important to understand because that as you age, the cost of insurance will likely begin to rise to meet it. If you have accumulated enough cash value for your policy over time, it will be used to cover any increases that are associated with your cost of insurance amount to maintain a level premium. Similar to a savings account, a portion of the cash value of a universal life insurance policy can be accessed without affecting the death benefit they have been guaranteed.
While there is some risk associated with universal life insurance, the reward that they provide can be very beneficial if permanent life insurance is needed. If you are considering this type of policy, it is important to plan for rising insurance costs and ensure you are generating enough cash value to make up the difference. If you want to learn more about universal life insurance, we encourage you to reach out to our friendly and knowledgeable brokers at Anchor Financial Group.
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If you are ready to focus on your financial planning, the Tulsa financial planning experts at Anchor Financial Group are ready to assist you. As a Veteran-owned brokerage firm, we always look out for the best interest of our clients. Please call us at (918) 591-2880 to get started or Contact Us and a friendly member of our staff will reach out to you promptly. We look forward to assisting you in achieving your financial goals in Tulsa.
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