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If you’re looking for a Houston TX adjustable life policy that would best suit your situation, you can sit down with an insurance agent from Best Life Insurance Houston Agency. They can show you all your available options before you finalize any of your and your family’s plans. Be sure to choose one that will suit your situation best.
Perhaps you have looked over how whole and term life insurance works. Those two are the most common types of life insurance out there, after all. The former is a type of permanent life insurance that is very stable. The latter is a temporary type of life insurance that will only last a decade to a few decades, depending on what you choose.
Houston TX Adjustable Life Policy Options!
However, a lifetime is long. Anything could happen. Perhaps you want to be prepared for whatever life throws at you, just in case. That’s where the value of life insurance policies that are adjustable shine.
The most common type is universal life insurance. Then there are the two that branch out from it: indexed universal and variable universal. Each has its quirks, and which you choose will depend on what works for you and your family.
Universal Life Insurance
Universal life insurance, like whole life insurance, is a type of permanent life plan. Sometimes guaranteed universal life insurance, it leans toward the conservative side and guarantees a fixed, minimum interest rate with the potential for some additional interest credits. In some cases, if you go through with the medical exam, you could increase the death benefit amount.
It is a policy that offers some flexibility down the line. Depending on the policy, you may adjust the death benefit and premium amounts in the future when necessary.
How does that work? Like whole life insurance plans, universal plans have a cash value. Your premiums go toward both the death benefits and cash value. Although to keep the policy in force, you’ll need to pay the minimum premium; otherwise, you can use the accumulated cash value to pay the premium.
If you have enough cash value, you can use it to pay the premium payments instead. However, the cash value of universal policies has an interest rate that can fluctuate alongside market interest rates. If the interest rate credited to your policy decreases to the minimum, your premium will increase to offset it.
Indexed Universal Life Insurance
Indexed universal life insurance might be a type of insurance plan for those who need the death benefit protection but are more focused on cash value accumulation. Whether you want to use the cash value to supplement retirement income or something else, indexed universal life plans can do that.
Like with universal life insurance, indexed universal has a flexible death benefit and premium. It works similarly to universal life plans in most aspects, except for how its cash value behaves.
Now, where does the “index” in index universal come from? An index is a group of investments like stocks or bonds. With index universal plans, you won’t directly invest in the market, but you use the performance of a specific index and interest rate to set for your policy.
Of course, index universal plans have a minimum guaranteed interest rate to protect you from losing money. However, the interest rates aren’t fixed or varied like some other life insurance policies. On the other hand, index universal plans usually have earnings caps, so you might miss out on some gains if the index performs better than your maximum.
Variable Universal Life Insurance
Variable universal life insurance is the least conservative type of Houston TX adjustable life policy. Like other universal life policies, it offers a flexible death benefit and premium later down the line. This type of policy is ideal for people who want a death benefit, along with the ability to choose how their cash value will grow.
The way it works is that there are sub-accounts that are available through your policy. These sub-accounts act similarly to mutual funds that you can invest your cash value into. Depending on how the market fluctuates, you can grow your cash value but also lose money.
You won’t be able to invest outside of the sub-accounts available to your policy, so you will be missing out on the options on the open market. However, any growth that does happen is potentially higher and tax-deferred. That is, it’ll grow tax-free until you take it out as a loan or withdraw it.
Which Houston TX Adjustable Life Policy is good for you?
Summing it up, being an adjustable life policy means you have some more flexibility down the line. You’ll be able to adjust the death benefit and premium amounts so long as you have enough accumulated cash value. If your living situation changes in any way that makes it challenging to keep up with the premium payments, then having an adjustable life policy will be optimal.
One of the types of adjustable life insurance policies is a universal life policy. With this type of plan, along with its variants, you can grow the cash value attached to your policy so you can adjust the death benefit and premium amounts later. Each type has its way to increase its cash value, ranging from a more hands-off, conservative method to a policy you can manage yourself.
Wait There’s More!
Universal life policies are the most conservative, with the cash value growing on a fixed interest rate. Indexed life policies have more potential to increase their cash value, depending on which index you choose. On the other hand, variable life policies have the most potential for growth, which is entirely dependent on which sub-accounts you invest the cash value into.
To choose which type of life insurance policy is the best for you and your family, you should sit down with an insurance agent first. Give us a call and check out our Houston location! The experts with Best Life Insurance Houston Agency will be sure to show you all the Houston TX adjustable life policy options that are available to you.
Houston, TX Fun Facts:
- Houston is home to 4 professional sports teams (basketball, baseball, football, and soccer).
- The Astrodome was the world’s first multi-use, domed sports stadium. It now sits defunct.
- Texas A&M buries its canine mascots in the Reveille Mascot Cemetery.
- For more information, visit the official website!