Understanding Universal Life Insurance

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Universal life insurance gives protection for the insured’s lifetime. Universal life insurance separates the cash value component of permanent life insurance.

The premiums are flexible and the investment component is optional, unlike Whole Life policies, where the cash value component is built in. You can start or stop your premium depending on the equity within the policy and you can also change your investment option at any time.

The are generally two types of death benefit options on a Universal Life plan:

1) Level death benefit

2) An increasing death benefit where the accumulation fund within the policy is paid out on top of the face amount.

Applicants looking to maximize the cash value within the policy will select a level death benefit, whereas applicants focused on estate creation and preservation will select an increasing death benefit.

Universal Life investment accounts can range from low-risk savings account, or guaranteed investment options, to higher risk equity or specialty funds. BMO Insurance‘s Universal life plan has over 400 investment options.

The cost of insurance options on Universal Life are generally broken down into the following:

1) An increasing cost of insurance. (the cost starts off low, but increases each year) This option is geared towards applicants focusing on cash accumulation.

2) Level cost of insurance – The cost of insurance remains level for life and is more geared towards applicants who want to maximize their estate and have cost certainty.

If you have any questions, please contact us at 1.866.899.4849 or visit our Universal Life Quote Page  

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