What is a Universal Life Insurance Quote?
A universal life insurance quote is a proposed price for universal life insurance. When looking for any type of life insurance, an insurance broker will ask questions in order to find and give the consumer an appropriate quote. This quote is an estimate of the amount the holder will be paying. There are several factors that determine a life insurance quote. These factors include the health of the holder, the location, and the amount of coverage the holder desires.
Universal life insurance is a type of long-term life insurance that invests a part of the paid premiums. With this life insurance, there is typically a minimum amount of interest that is guaranteed to be paid into the holder’s account each month. The policy holder also has a certain amount of freedom to decide where his money will go. The downside of this policy is that the interest rate is variable. This can mean big payoffs when the rates are climbing and losses when the rate is falling.
Each month when the premiums are paid, some of the premium is credited to the holder’s account value. Interest is also credited into the account value. After the cost of the life insurance and any expenses are paid out, the remaining money is left in the policy holder’s account value. The holder is also able to adjust the proportions of money would like to put into his insurance or savings. This means that he can choose to either put more in savings or to put it into his insurance so his death benefits increase.
A universal life insurance quote, like all life insurance quotes, depends on many factors. Quotes may vary according to location, the height of the holder, or the weight of the holder. Insurance tends to get more expensive as the insured gets older, so age is also a factor. The amount of coverage the holder chooses will also affect the universal life insurance quote. This is also true of the holder’s health.
Who should buy a Universal life Policy
Since universal life insurance allows flexibility, this is a perfect policy for a someone who anticipates varying degrees of coverage, but does not want to keep switching policies.
If you have not taken on too many new financial obligations, such as a mortgage, or had too many expenses, such as college or a newborn, but know that such commitments are in your future - consider this option.
Keep in mind that this type of policy requires organization to keep track of the varying prices and coverage. If you prefer to pay your premiums and leave the rest to the experts, you might be better off with standard whole life insurance. If you want even more control over policy details, consider variable life insurance.
The Difference between Whole Life Insurance and Universal Life Insurance
Here's the difference in a nutshell:-
Whole life guarantees the death benefit for life, guarantees the cash value and guarantees the premium - period.
Universal life insurance assumes an interest rate and the cost of insurance and comes up with a projected premium. If the insurance companies' projections on their universal life policy do not come through, then you may have to come up with higher premiums later, have lower than expected cash values or even lose the policy – but…..
