Benefits of Universal Life Insurance Policy

There are various types of life insurance policies. You need to be well rehearsed with the jargon related to insurance and be thorough with the understanding of these policies, in order to pick the right one. We will discuss about one such policy called universal life insurance policy here, and hope to provide you with some knowledge about its benefits.

A universal life insurance policy is a permanent insurance policy. It is based on cash value wherein premium payments beyond the cost of insurance get credited to the cash value. This cash value accrues interest every passing month whereas the policy is debited every month by a cost of insurance charge. The interest accrued is generally determined by the insurer and pegged to a financial index.

But how good is this kind of insurance policy? Well, here are some benefits of this policy:

· Covers debts: It helps pay off business debts such as business operating loans and personal debts such as home mortgage loans.

· Estate replacement: If you have donated assets to a charity foundation, your insurer will replace the value with cash death benefits.

· Pays funeral expenses: Funeral, burial and unpaid medical bills are resolved by your insurers.

· Executive bonus: Your insurer will ensure your employer pays you executive bonus in return of the heightened income tax you paid on premium.

· Non qualified deferred compensation: A corporation owning a policy and paying its premiums will need to pay you back the benefits he receives from the policy. If you are retired, you will be furnished with added retirement benefits and after death too, your immediate family becomes an automatic beneficiary of the same benefits.

· Key person insurance: In the event of a key person (owner/manager of a company) passing away suddenly, the insurer will protect the company from economic loss.

There are many other benefits which you can enjoy with this life insurance policy. Make sure you read through the entire brochure of this policy and keep in mind the life insurance rates as well before deciding to adopt this insurance policy.