It’s true that life insurance is, first and foremost, an insurance policy. You pay premiums every month designed to cover the cost of keeping the policy in force, and in return, the insurance company pays a death benefit to your named beneficiary(ies) when you pass away. Death benefits are usually tax-free to the recipient and can be used by your beneficiaries to make up for the loss of your income, to pay your final expenses and debts , and to fund children's education costs .
When you take the step to purchase universal life insurance instead of a term life insurance policy your coverage becomes more than just an insurance policy. Your protection stays in force as long as you make premium payments and until the policy's maturity date. The premiums you pay not only cover the cost of insurance, but also fund a "cash value" account within your policy, which may further be credited with a fixed interest rate.
If you are considering buying a universal life or other permanent insurance policy and are intrigued by the savings component, it is important to understand how such policies work. In general, cash value life insurance policies have the following features:
You should never buy life insurance for the sole purpose of having a savings account, because the cost of insurance does go up over time, based on mortality risk and policy expenses. However, as an added bonus, knowing that your policy is accumulating cash on the side - funds that you can access during an emergency - can give you and your family peace of mind.
The type of life insurance policy that is best for your particular situation will depend on a variety of factors, including why you need insurance coverage, your attained age and health, your financial picture, and your ability to fund the policy.
Get in touch with a Symmetry Financial Group insurance professional to review your insurance needs and goals and let us find policy options designed to meet your objectives - working within your budget. To get started, contact us today . Look through our Guide to Life Insurance to find out more about life insurance, and how a policy can help you.