Universal Life Insurance: Can I Financially Protect My Loved Ones While Saving for Retirement?
Universal Life Insurance can help ensure your family is financially protected should something happen to you.
Universal Life (UL) insurance is a type of whole life insurance that offers a ton of flexibility for the extent of your life. With this type of permanent insurance, you can choose the face amount, premium amount, and even the type of investment options you want your premiums to be invested in. This level of flexibility makes UL a strong option for adults 55+ who are looking to financially protect their loved ones while saving for retirement.
Types of Universal Life Insurance policies:
Since UL is tied to investment performance, your cash value growth may vary with some level of risk. Consider which type of UL you are comfortable with:
Variable ULs may have more upside growth potential but are tied to the market performance, which will increase or decrease based on the economic conditions.
Indexed ULs Since it’s tied to an index, the floor is typically 0% growth, which means you will never lose money. You’re guaranteeing that the cash value will not decrease during a down economic period, but rather, it simply will not increase.
Benefits of UL Insurance
Top 3 UL benefits to consider include:
Flexibility: Unlike Term Life policies, you have the ability to pick your own death benefit, premium amount, and even the type of investment options you want your premiums to be invested in. This flexibility can be a great advantage for those looking for a way to customize their insurance coverage to meet their specific needs.
Tax-deferred growth: The cash value of a universal life insurance policy can grow tax-deferred, which can help you save money on taxes. This can be a smart way to accumulate money for retirement..
Death benefit: You can rest assured knowing that your family is financially supported after you pass away. This death benefit can help to cover funeral expenses, pay off debts, or provide income for your loved ones.
Downside of UL Insurance:
While there are many benefits to UL policies, there are also some drawbacks to consider including:
Cost: Universal life insurance can be more expensive than other types of life insurance, such as term life insurance mainly because it offers more flexibility and features.
Surrender charges: Just like a lease on a car or apartment, if you surrender (or break) your universal life insurance policy before the end of the surrender period (or lease agreement), you may have to pay surrender charge which can be a significant financial burden. Therefore, it is important to understand the terms of your policy before purchasing.
Investment risk: The cash value of a universal life insurance policy is invested in the stock market (such as the S&P 500), which means that there is the potential for loss. If the stock market declines, the value of your cash value may decrease. With all UL’s the risk is tied to your cash value growth through the stock market and has little to do with your actual death benefit payout received by your beneficiary upon death.
Considerations for Universal Life Insurance:
If you are an adult 55+ considering universal life insurance, consider:
Your health: which can impact the cost of your UL policy. Disclose your health conditions to your insurance company and share your medication list and ailments with your Pivotal Insurance agent.
Your income: can also affect the cost of your universal life insurance policy. If you have a limited income, you may want to consider a lower death benefit or a lower premium amount.
Your investment goals: If you have specific goals, be sure to choose a UL policy that offers the investment options you are looking for.
Is Universal Life Insurance Right for You?
If you are a senior citizen looking for a way to financially protect your loved ones while saving for retirement, universal life insurance may be a great option. However, with any investment, you should closely consider the pros and cons before purchasing a UL policy.If you have questions about whether universal life insurance is right for you, contact a Pivotal Insurance advisor who will assess your needs and goals and recommend the best type of life insurance for you.
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About Pivotal Life Insurance
Pivotal Life Insurance is a family owned, independent insurance agency that focuses on income protection and family security through Life Insurance products (Term Life, Whole Life, Final Expense), Mortgage Protection and Annuities. With a range of product offerings, we accommodate the varying needs of our clients through resources provided by the nation’s top rated carriers. Although we are headquartered in South Florida with a branch in Maryland, we service most of the United States as our agents are licensed throughout the country. Pivotal Life Insurance is one of the fastest-growing agencies and we pride ourselves in putting you, our customers, first.
Insurance Is Pivotal. Cherish what’s important.
For more information or if you’d like to join the Pivotal family, visit www.insuranceispivotal.com or call at 561-412-5500.