When considering Life insurance it’s important to understand the many different types of insurance that are available on the market in Canada. Insurance policies are sometimes difficult to comprehend if they aren’t explained well. We’ll make this article as simple as possible and cut out all the frills so that you can better understand the function of a Universal Life insurance policy to help you determine if this might be the right policy for you. Of course we’ll always recommend that you speak with one of our Experior Financial Group Associates who can work with you to determine the best type of insurance for your unique needs.
What is Universal Life Insurance?
Universal life insurance gives you flexible lifetime coverage. It is a type of permanent insurance that includes an investment component. Universal Life insurance can be a low cost form of insurance similar to a Term Life insurance policy in affordability but different in many ways. It can be a great option for those who are looking for a combination of insurance and investment opportunities.
Advantages of Universal Life Insurance
- Protection for your entire life. This policy covers from the time you begin your policy all the way up until death.
- Remittance can be made through the payment schedule. Premium payment is flexible and allows you to pay less now and pay more in the future if you need that to keep your coverage.
- Universal Life has some income tax advantages. Interest on money that has accumulated is tax deferred. Tax implications will however occur at the time the money is withdrawn from the policy. It’s best to consult your Experior Financial Associate prior to making changes to the values in your policy.
- Money can be withdrawn. You can utilize funds in a variety of ways. As always it is best to speak to your Experior Financial Associate to ensure you get the most out of your withdrawal.
Disadvantages of Universal Life Insurance
- Receiving unpredictable returns. Cash value will tend to go up and down with the Market.
- Universal Life has a cash value in the policy so this can cost you more than a term policy.
- Having to pay surrender fees. If you decide to cancel your Universal Life policy and depending on the surrender schedule in the policy you may not be able to take out any cash value.
- You may be required to keep paying premiums until you die, if the cost of insurance continues to increase and/or the investment returns are not as high as what was expected.
- Cash value fluctuates depending on the market at the time.
Benefits of Whole Life Insurance with Experior Financial Group
The benefits of a Whole Life insurance policy with Experior Financial Group are;
- Guaranteed premiums that do not increase.
- Cash value component that does increase over time.
- Investment that is tax-sheltered and never decreases in value regardless of downturns in the market.
- Your banking institution views this as an asset.
- Coverage for your lifetime and provides your family with a tax free death benefit that will not decrease in value.
- You cannot outlive the benefits in a Whole Life insurance policy.
- Death benefits are paid to your beneficiary without requirement to probate.
We work hard to get you the best product that meets your unique needs. We offer Whole Life, Term, Universal or Permanent Life Insurance that will meet your needs and your budget. We are a Managing General Agency and not an insurance company so our Associates work for you and will do an assessment of your needs and obligations to determine the right financial pathway for you and your family’s needs and goals. We will recommend the right life insurance protection from the many available on the market while working within your budget. Our Financial Associate will review any policy insurance plans, financial requirements and provide you with recommendations for the best insurance coverage, investment options and debt reduction strategies. You are in good hands with an Experior Financial Group Associate.
Yes, a Universal Life insurance policy can be a great combination of investment and insurance rather than having them as separate plans. You get protection for yourself and your family with the added benefit of the investment value that grows tax-deferred. Another benefit is that it may act as a retirement income supplement when you retire. An Experior Financial Associate can walk you through all the details of ways you can benefit from this unique investment or if there is a better plan for you.
Both Universal Life and Whole Life insurance are a type of permanent insurance. Whole life offers consistent premiums and a guaranteed cash value accumulation while a universal life policy offers flexible premiums and death benefits. You can borrow against the cash value of both a Universal or Whole Life policy.
Absolutely, you can withdraw the cash value of the policy. You will want to have a good understanding of how it works prior to your withdrawal.
If you would like to speak to a knowledgeable and licensed professional about your financial situation you can click here. Our Financial Associates can help you with debt reductions strategies, planning for retirement, protecting your income and determining your insurance needs all with a free, no obligation consultation. They would love to help you today!