Shreveport Life Insurance Basics: What is a Universal Life Policy?
In Shreveport, if you are looking for a universal life insurance policy, you should know it is a type of permanent life insurance that offers policyholders the flexibility to choose their premium payments and death benefit.
It also allows policyholders to accumulate cash value, which can be used for a variety of purposes, such as paying for premiums, making withdrawals, or borrowing against.
Flexible Premiums
Universal life insurance policies offer policyholders the flexibility to choose their premium payments. This means that policyholders can make monthly, quarterly, semi-annual, or annual payments, and they can also change the amount of their premiums as needed.
This flexibility is a major advantage of universal life insurance policies, as it allows policyholders to adapt their payments to their changing financial circumstances. For example, if a policyholder experiences a financial hardship, they can reduce their premiums without lapsing their coverage.
Cash Value Accumulation
A universal life insurance policy also has a cash value component, which is a savings account that is funded by a portion of the policyholder’s premiums. The cash value can grow over time through a combination of interest and dividends.
Policyholders can use the cash value for a variety of purposes, such as paying for premiums, making withdrawals, or borrowing against. The cash value can also be used to provide a death benefit to beneficiaries in the event of the policyholder’s death.
Tax Benefits
Universal life insurance policies offer a variety of tax benefits, which can make them a valuable financial tool. For example, the cash value in a universal life insurance policy grows tax-deferred, which means that policyholders do not have to pay taxes on the investment earnings until they withdraw the funds.
Ability to Change Coverage as Needed
Universal life insurance policies also offer policyholders the ability to change their coverage as needed. This flexibility is important for policyholders whose needs may change over time. For example, a policyholder may want to increase their death benefit after the birth of a child or decrease their premiums after retirement.
Types of Universal Life Policies Available in the Ark-La-Tex Area
There are two main types of universal life insurance policies available in the Ark-La-Tex area: indexed universal life insurance (IUL) and variable universal life insurance (VUL).
Indexed universal life insurance policies offer policyholders the potential for higher returns than traditional universal life insurance policies. This is because the cash value in an IUL policy is linked to an index, such as the stock market. However, IUL policies also have the potential for losses if the index declines.
Variable universal life insurance policies give policyholders more control over their investment options. This means that policyholders can choose to invest their cash value in a variety of investments, such as stocks, bonds, and mutual funds. However, VUL policies also have the potential for higher losses than traditional universal life insurance policies.
Which Universal Life Insurance Policy is Right for You?
The best universal life insurance policy for you will depend on your individual needs and circumstances. If you are looking for a policy with the potential for higher returns, then an IUL policy may be a good option for you. However, if you are looking for a policy with more stability, then a traditional universal life insurance policy may be a better choice.
It is important to speak with a financial advisor to determine which universal life insurance policy is right for you. A financial advisor can help you understand the different types of policies available and can recommend a policy that meets your specific needs.
Watley Insurance Group Can Help
Watley Insurance Group is a leading provider of life insurance in the Ark-La-Tex area. We offer a variety of universal life insurance policies to meet the needs of our clients. Our experienced agents can help you understand the different types of policies available and can recommend a policy that is right for you.
To learn more about universal life insurance or to get a quote, contact Watley Insurance Group today.
We are here to help you protect your loved ones and your financial future.
