Understanding
the Variable Universal Life
Insurance Policy - Information
 With
the plethora of insurance policies available, you are sure to find
a policy that is tailored fit. All it requires is a little forethought,
research and of course, 1st Insurance Quotes.com. To guide you on
your way, we have devoted this page to helping you understand Variable
Universal Life Insurance. You may discover that it is just the right
choice for you!
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to request
a quote now!)
History
has revealed just how old the concept of insurance is. Would you
believe 2100 B.C.? At the time, there was a certain amount of risk
associated with caravan trade, and traders were encouraged to assume
these risks with loans that were only repaid once the shipment was
delivered. Today, insurance concepts are not quite as simple, but
insurance remains a universal need! The most important thing to
keep in mind is your individual requirements. After all, if you
were not a trader, what benefit would you reap from 'insuring' the
safe arrival of goods?
Variable Universal Life
Insurance is a unique blending of permanent life insurance and investment
flexibility. This type of policy provides lifetime insurance protection,
as well as an opportunity to invest in tomorrow. Simply put variable
universal policies are divided into two parts. The first part pays
for the cost of your policy. The second part is distributed among
sub accounts that are invested in cash equivalent vehicles of your
choice. Popular portfolios include stock, bond, balanced, international
and money-market accounts. Still others choose a fixed-rate general
account. Each of these sub accounts has the potential for tax-free
cash accumulation.
There are a number of
factors to keep in mind, when considering a variable universal policy:
The performance of your investments will directly impact your
death benefit and the policy's cash value. As the policyholder,
you will need to devote an appropriate amount of time to the management
of your accounts.
Variable universal
insurance programs permit you to make withdrawals or borrow from
the policy. Policyholders often choose to utilize their policy
to build a college fund, provide for a deferred compensation plan
or to serve as a supplement to their retirement income.
There are a number of tax advantages to contemplate. As mentioned,
cash accumulates tax-free. In addition, the death benefit is typically
tax-exempt, as are any policy loans. However, keep in mind that
withdrawals and policy loans affect the policy's overall cash
value and death benefit. Be sure to consult your agent before
making any type of withdrawals - they will be able to advise you
of your best options!
Flexibility! Flexibility!
Flexibility! As your insurance needs change, variable universal
life insurance generally provides you with the option of increasing
or decreasing the amount of coverage. Additionally, funds can
be transferred between your sub accounts (investments) tax-free.
The result? Freedom to make decisions best for you and your family!
For some, the premiums
associated with variable universal insurance can seem a bit daunting.
After all, small premium amounts will not cover your insurance
and your investment accounts.
And finally, rates
and coverage greatly vary from state to state and insurance company
to insurance company.
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