Premiums

Universal life policies come with three types of premiums: Single, Fixed and Flexible. Each provides a different benefit to the policyholder.

• Single Premiums – A single premium policy allows the policyholder to make a large, initial payment to fully fund the policy.
• Fixed Premiums – A fixed premium policy provides lapse guarantee and the policyholder will pay periodic premium payments. Often, payments will be for a shorter amount of time than the policy covers.
• Flexible Premiums – A flexible premium policy allows the policyholder to change the premium within certain limits to fit their specific needs. This type of policy will allow for skipped payments and other variations, as long as the cash value is sufficient enough.

If you are interested in finding out more about a universal life insurance policy, call a Jacksonville agent at Thomas & Associates today for your Free Quote!

Cash Value of Universal Life Insurance

The cash value or living benefits of the policy allow the owner the ability to borrow against the policy. The benefits include:

• Loans
• Withdrawals
• Split Dollar Agreements
• Pension Funding
• Tax Planning
• Collateral Assignments

These benefits may vary from one policy to another with the most common being the ability to take out a policy loan.

When a policyholder takes out a loan against the policy, they will need to pay interest to the insurance company. If the interest isn’t paid, it will be deducted from the policy’s cash value.

Another benefit of universal life insurance is the ability to surrender or partially surrender your policy and use the cash however you see fit. If you surrender your policy during the first few years, you may pay a surrender fee, however. You will also be relinquishing your death benefit protection, if you use a full surrender of the policy.

You will also need to pay income tax on the gains from the policy. If there is an outstanding loan balance against the policy, you may have to pay additional taxes, as well. After surrendering your policy, it may be harder or cost more to get the same type of coverage.

Permanent Life Protection

A universal life insurance policy provides permanent life protection by combining a savings element with a term element. This allows for a lower premium compared to whole life insurance, but you still gain the cash value aspect.

Choosing the right type of life insurance may be tricky. It’s not completely black and white and you may need the help of a trained agent. For those living in the Jacksonville, Florida area, a call to Thomas & Associates will ensure you receive accurate answers for all your questions. We will gladly help you choose the right life insurance for your specific needs. Call us today and speak with one of our local agents.