Houston TX Universal Life

Among the various types of insurance plans are Houston TX universal life policies. There are temporary plans like term life insurance or permanent ones such as whole and universal life plans. There are so many; parsing through them to find the optimal policy for you can be challenging.

If you have questions regarding which insurance plan could be right for you and your family, contact us today! Any of the experts with Best Life Insurance Houston Agency would be happy to sit down with you.

What Is Houston TX Universal Life?

Standing among the permanent life insurance plans available are Houston TX universal life plans. Like other permanent life plans, you’ll be protected for a lifetime. And, you also have a guaranteed death benefit so long as the premiums are paid. Not to mention, most permanent policies also have cash value.

The cash value of a policy can be used for several things. Depending on the insurance plan, you could use it as a supplementary retirement fund or a future college fund for your children. Therefore, you should choose your life insurance plan wisely.

Now, what makes universal life insurance universal life insurance? Simple. Its flexibility. Compared to whole life plans, where the death benefit and premium amounts are fixed throughout the policy, universal life plans allow you to adjust those later down the line.

With universal life plans, there’s also a better chance that the cash value accumulated will be higher than with whole life insurance plans. Depending on the policy, you could earn greater gains and grow your cash value significantly.

How does Houston TX Universal Life insurance work?

What does it mean that universal life plans are flexible? As mentioned earlier, there’s a possibility that you’ll be able to adjust the death benefit and premium amounts later in the policy’s lifetime.

A lifetime is long and full of surprises, both fortunate and unfortunate. Anything could happen, and you may want to prepare yourself if something happens out of your control. Universal life plans give you the option to do so.

Maybe you’ll run into a situation where the premium payments are straining your budget or some other financial situation that makes it difficult to make the payments. You may be able to pay the premium with your policy’s accumulated cash value.

Depending on the policy, you can pay for the premium with the cash value. Usually, you’ll still need to pay a minimum premium to keep your policy active. Otherwise, as long as your policy has accumulated enough cash value, you can keep using it until it depletes.

Typically, your universal life plan’s cash value grows based on a fixed interest rate. Of course, some variant types of universal life plans increase their cash value differently, but more on them later.

Your cash value grows tax-deferred. That is, it grows tax-free until you decide to take it out as a loan or withdraw it. If you allow it to grow long-term, you’ll see a good sum in the policy’s later years.

Other Plans with “Universal Life Insurance” in the Name

As mentioned before, there are several variants of universal life plans. Guaranteed, indexed, and variable universal life plans are the most notable. Each one has a mouthful of a name, and each accumulates cash value differently.

If anything, they keep their flexibility and lifetime protection. You can usually still adjust the death benefit amounts and premium payments so long as there’s enough cash value.

Guaranteed Universal Life Insurance

Guaranteed universal life insurance is a fancy term for the typical universal life plan. These plans, as explained earlier, are the basis of most universal life plans. They last for a lifetime and build interest. With flexible premiums and death benefits, you can adjust them later if you need to.

The interest rates for these plans are usually fixed. You’re guaranteed to build cash value at a steady pace. If you’re more of the conservative sort, then these plans may be the most optimal for you.

Indexed Universal Life Insurance

Indexed universal life insurance builds its cash value a bit differently than guaranteed plans. First off, your cash value has a higher potential to grow since the interest rate isn’t fixed.

How does that work? The policy will use the interest rate of an index of your choosing and grow or drop from there. An index is a group of investments like bonds or stocks, so its interest rate will fluctuate with the market. So, your cash value can grow faster or not at all.

Most indexed universal life plans have a minimum guaranteed interest rate if you’re worried that you’ll lose more than you want. It’s protection against your policy losing money.

Variable Universal Life Insurance

The riskiest of the plans listed here are variable universal life plans. Like indexed universal plans, your cash value will grow with the market. Unlike indexed universal plans, it’s because you’ll be increasing your cash value by investing in the market.

Most variable universal plans will have sub-accounts attached to them. These sub-accounts work like mutual funds. You’ll have the option to split up your cash value to invest in the available sub-accounts or a fixed account and grow your cash value that way.

The potential of growing your cash value is the highest with variable universal life plans, but you can lose just as much if you’re not careful. Be sure to calculate how much risk you’re willing to make before deciding.

A Universal Life Insurance Plan for You

If you’re looking for flexibility, then universal life plans might be an option for you. Universal life plans are optimal with protection for a lifetime that offers you a chance to adjust depending on future life changes. Depending on which policy you choose, you can accumulate cash value at your leisure and use it to your and your family’s advantage.

If you have any questions regarding universal life plans, you should ask an insurance agent. Give us a call and we can help! Any of the experts with Best Life Insurance Houston Agency can answer questions regarding Houston TX universal life insurance plans.

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