Universal Life - The Best Kept Secret

Universal life is perhaps the best kept secret within the spectrum of life insurance products.  To consider it intelligently, a brief overview is helpful.

A life policy guarantees income tax-free money in the future... for those who rely on you today.

It is the smartest way possible for you to make certain your loved ones standard of living will never be jeopardized - a standard which they can lose in a heartbeat when you're gone.

This is money when it's needed the most!

Buying a policy can be challenging because life insurance quotes are all over the place.  It's not easy to figure out which product has the best long-term value.

Should you buy term and invest the difference... because you read somewhere that your family really won't need the protection after a certain number of years?

Or, should you buy a plan that provides cash value... something more permanent that will be around for a longer period of time?

Buy term and invest the difference is a phrase touted by those who seem oblivious to the harm this strategy can do.

On the surface, it seems reasonable.  The problem is we're living longer than ever before and, in all likelihood, your loved ones will still need the money many years beyond the expiration of the term plan.

The need to protect lifestyle doesn't simply go away.  There is always a need for money when the breadwinner dies... even if he or she has already retired.

An intelligently purchased life insurance policy can be the saving grace for those you love. Universal life is the most flexible type of policy on the market.  Its premium is higher than term, but lower than whole life.

If you get term because of budget constraints, then make sure you buy from a company that also offers universal life.

As your budget permits, you can convert the term product into the universal product a little at a time.  This means you can change from temporary to permanent - even if you become uninsurable in the future.

One word of caution.  Long term interest rates are critical to the performance of universal life policies.

Because rates have been depressed for several years now and might continue to be for some time, don't buy a universal plan unless it comes with an unconditional death benefit guarantee.

This means that even if interest rates plunge downwards the death benefit continues to be guaranteed provided the premium is paid on time.

The premium for this type of universal life policy is higher than one based solely upon so-called current rates, but you the death benefit will be there for as long as necessary.

Incidentally... don't fail to review how the variable universal life policy works.