Are you hard pressed for the premium money?

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Often you will find it difficult to pay the policy amount owing to the other pressing expenses. On such occasions you don't have to worry .Here is a kind of insurance that has got the flexibility to change the policy amount even after entering a policy for different amount. Have a look at this policy in the article.The article covers

• What is universal insurance policy?
• What are the benefits of life insurance universal?
• What are the tax advantages in it?
• What are the disadvantages of this policy?

Universal Life insurance is a type of permanent life insurance policy. Unlike other insurance policies one can change the policy amount .At times the insured finds it difficult to pay the premiums because of some financial commitments. On such occasions the insured is not able to change the policy amount This policy allows the insured to change the policy amount.

Some of the advantages of this policy are as follows:

Innumerable death benefits

This policy allows flexibility in the amount of death benefits. You are free to change them to suit your convenience. There is another special feature associated with universal life insurance policy. The policy provides for lapse protection which entails you to enjoy the benefits as long as you pay the premiums regularly. Even if it does not have the provision of lapse protection the maturity amount will be paid in the event of death after deducting the money borrowed.

Premium Options

The insured is at liberty to make his choice in paying the premiums. You can either pay the premium at regular intervals or in one stroke. However you cannot change the amount of premiums to be paid.. You cannot pay less or more that the prescribed limits. Your dependents will not be able to enjoy the death benefits if you fail to pay the premiums.

However you can make the payments within as and when you wish. Another notable feature of this policy is that it does not get automatically cancelled even if you fail to pay the premiums. The underlying condition is that the premiums paid till date should be sufficient enough to meet the policy requirements till now.

Protection options

The insurance company not only allows you to choose premium payments but also gives you a choice in choosing protection limits. Suppose you feel that you require more or less protection you can alter your policy accordingly. The biggest advantage is that that when you increase the policy amount it is not necessary for you to buy an additional policy. However you need to get them approved by an underwriter.

You can reduce the amount in case you need to meet other financial commitments and as well as increase them once you have met them if you desire so. In case you decrease the amount the company follows a different procedure of applying a surrender charge against the policy's cash value.

Source for obtaining finance

This insurance policy also helps you in raising finance. You will be able to borrow money from the insurance company in the form of surrender value and loans. Surrender value is an option whereby you can surrender a part of the policy and claim the cash equivalent for the surrendered policy. You will also be able to borrow loans from these insurance companies like any commercial banks. These facilities will help you to claim income tax concessions. If you are willing to raise finance from the insurer the prerequisite is that your policy should not be a modified endowment contract.

Since universal life insurance is a long term investment it is not advised to borrow money either by loans or through surrender values as they reduce your policy amount. In case of emergency needs you may still consider them if you are promptly able to repay them with interests if any so that it does not affect your policy.

Death benefits

There are two types of benefits during death when a person chooses a universal insurance policy. When a person invests in this policy the increase or decrease of his cash value does not influence the policy amount. Moreover when there is an increase in cash value the insurance company creates an extra insurance policy for the increased amount.