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| Tuesday, April 12, 2011 |
| Investing in a Life Insurance Is It a Right |
The largest difference between Whole Life and Universal Life is that on a Whole Life policyowner, the investment part is built in to the premium, but on a Universal Life policyowner it is separate. In addition, Universal Life policies offer a greater diversity of investment possibilities. When you are deciding for the best life insurance, the key aspect is that it ought to fit your situation and needs. If your needs are met and the premium for a permanent life insurance is reasonable for you, the next key aspect is whether it is a sound investment.
Benefits
* Proceeds within the policyowner and the MTAR limits increase on a tax sheltered basis. In case of Whole Life policies, the premium shouldn't exceed the MTAR limit, Universal Life policies set a maximum premium according to the MTAR limit.
* Both the investment portion on an increasing death benefit Universal Life policyowner and the dividends on a Whole Life policyowner are added to the face amount and paid out on top of this face amount, tax free.
* You can use the investment part on a permanent policyowner to pay for future premiums, allowing you to pay future premiums with pre-tax money, than after-tax money.
* Numerous Universal Life policies have maximum investment rate guarantees in excess of 4%. This is a great and for investors who don't like to risk, in today's low rate of interest world.
* Lots of permanent insurance products have surrender penalties if the plan is cancelled within the first few policyowner years.
* Usually, it is not a nice suggestion to select a permanent policyowner, in case you don't need a permanent life insurance, as the mortality charge for the life insurance would be higher.
Minuses
* Many permanent insurance products have surrender penalties if the plan is cancelled within the first few policy years.
* Generally, it is not a good idea to choose a permanent policy, if you don't need a permanent life insurance, as the mortality charge for the life insurance would be higher. |
posted by chalsie @ 5:17 PM  |
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