Insurance acts as a protection shield from any unforeseen circumstances. Insurance can cover all expenses throughout life. You are securing your life and your loved ones by just paying a premium. Getting insurance is a decision that you will not regret after making it. Most of the time, people need clarification on which policy to get. Consult the best Insurance Brokers in Alberta to learn about different types of insurance. In this article, you will learn about universal insurance and its pros and cons.
Universal Insurance (UI) is a permanent insurance that is a secure force throughout life. It also has a cash value element, which acts as a saving or investment that you can use anytime. This policy provides you with all the benefits that a term or whole life insurance gives you. The differentiated point that makes a Universal Insurance policy worth it is that an insured can adjust the premium. You can select the premium amount according to your capability. Constantly paying premiums gives you the maximum benefits, but if you stop paying or delay it, your death benefits may be affected under the policy.
Universal insurance comes with a component of the cost of insurance in which you have to pay the premium in a number of installments. This may add some extra charges for administration or other expenses that will be incurred to keep the policy active. However, the cash value of the policy increases with time, and the excess amount paid on Universal Insurance will also get covered. An Insurance Company in Canada will provide you with prior consultation and complete knowledge about the policy in advance to get you the best benefits under a policy.
PROs of Universal Insurance
Premiums can be flexible.
Every whole life or term policy has a fixed premium that a policyholder must pay to keep active. However, premiums under Universal Insurance can be managed according to an individual’s paying capacity. This will increase the chances that the policy will remain active as you will constantly contribute a small amount to the company on a timely basis.
Ensured death benefits
You can ensure death benefits by regularly paying premiums. You can also increase or decrease your death benefits based on the value of the premium. To get death benefits in any policy, you need a general medical exam, and benefits are provided accordingly.
Cash value gets increased
The premium you pay is saved in a savings account, where you can earn an interest rate over time. As the value increases, the interest rate will also accumulate. These interests will boost your overall savings and benefits of Universal Insurance.
Get a loan at lower interest rates.
As the accumulated cost of the insurance increases, you can take loans and withdraw money. These loans have lower interest rates than the other loans available in the market. If you take loans out of the policy, the tax implications will also be low.
Cons of Universal Insurance
Policy can lapse
If the policy value or cash value falls to zero and the small amount of premium does not cover the cost of insurance, the chances of a policy lapse increase. A policy lapse means that you cannot avail yourself of any benefits of the policy and cannot claim anything from the policy provider.
May cash value not get increased.
If interest rates do not rise, cash value can decrease, impacting the overall benefits of the insurance. In this case, it is advisable to consult the Best Insurance Brokers in Calgary before buying any policy.
It may provide low death benefits
A lower premium may affect the death benefits, which are only paid to the policyholder’s successors. The cash value of the policy is kept with the insurance provider after the policyholder’s death, so a low cash value gives you low benefits.
Conclusion
Getting insurance is a decision that makes you feel relaxed and provides you peace of mind. Consult an Insurance Company in Canada to get a policy that can provide immediate financial aid in any critical situation. Compare the policies and then buy insurance for better and guaranteed results.
