I’m going to start with a little disclaimer…
Please don’t take these thoughts and ideas as Life Insurance Gospel.
This is my theory on a product I deem to be very important in protecting the well-being of a family. There are many reasons why Universal Life Insurance may not be right for you, but I do recommend you consider the product as part of your personal insurance program.
Every insurance professional is going to have their own thoughts and feelings and I encourage you to align yourself with an insurance advisor that you trust and respect.
All that being said:
My Argument For Universal Life Insurance
- Policy Can Be Paid Up at 62 – This is a huge advantage in my opinion. Paid up at 62 means that when you hit retirement age you no longer have life insurance premiums to pay but you still have coverage and are most likely still accumulating cash value. For most Americans, with retirement, also comes the needs to curb excess spending. If you can avoid paying life insurance premiums, why wouldn’t you?
- Coverage Lasts Past Age 80 – For the majority of term life insurance policies that are available today, coverage does not extend past age 80. So if you live past age 80, what are you supposed to do? Hope you budgeted correctly I guess… Universal Life Insurance provides coverage past age 80. So if your premiums are paid up at 62 (see #1) universal life insurance provides coverage past age 80 at no out of pocket cost to you.
- Cash Value Provides Tool For Future Need – Let me start by saying I do not consider a Universal Life Insurance policy an investment tool. I know there are people out that would disagree with me and if you want to use your policy as an investment tool I would defer to those professionals. That being said the cash value that accumulates within a Universal Life policy is a very useful tool in the event that you have need of immediate cash. The cash value can be also be borrowed against, however I only recommend this in dire circumstances. The cash value is a bonus, a value-add, a tool to be used when life demands it.
Why Under 40?
That is pretty simple. Under the age of 40 the premiums are most conducive to the paid up at 62 feature of the policy. Buying a policy at an early age allows you to spread the premium over a longer period of time reducing your monthly premium burden. Additionally, people don’t just die when they are old. If you pass at 35 when your family is young there is a good chance the devastation felt by your survivors will be more significant than in your later years.
This isn’t age discrimination, people 41 or older should consider Universal Life too. Its just my opinion that buying a policy earlier in life allows you to Max Out the benefit received.
The Rub
Honestly, this is just a frosting of the analysis that you need to do with your insurance professional before determining if a Universal Life policy is right for you and your family. These are three key points that I tend to focus in on and I hope will help you get the conversation started.
Life insurance is not a luxury… Its a vital part of protecting your family. I guarantee there is waste in your life somewhere that could be used to fund a Life Insurance policy.
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Thank you and Good Luck.
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Disclaimer: This article is for informational purposely only. There is no legal advice being suggested or proffered and the author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information.
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