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Universal life insurance offers both life protection and a savings component, making it a flexible financial tool. The policy provides a death benefit for your loved ones, helping cover funeral costs, debts, and other financial obligations. Additionally, its savings feature grows tax-deferred, meaning you won’t pay taxes on earnings until they’re withdrawn.
Flexibility
A key advantage of universal life insurance is its flexibility. Policyholders can adjust premium payments to suit their financial situation. For example, Maria, who pays a $100 monthly premium, receives a bonus and adds $500 to her policy. This not only boosts her savings but also increases her death benefit, providing greater protection.
Security
Universal life insurance guarantees financial security for your beneficiaries. For instance, if John has a $500,000 death benefit and passes away, his family will receive the full, tax-free amount to help them through tough times. This ensures immediate financial support.
Diversification
Policyholders can invest their savings in various options, from conservative to aggressive, based on their risk tolerance. Sarah, for example, invests in a mix of bond and balanced funds, creating a diversified portfolio that balances safety with growth potential. Universal life insurance’s investment options allow for a personalized, diversified savings strategy.
In summary, universal life insurance offers flexibility, security, and investment choices, making it a versatile option for long-term financial planning.