Understanding Universal Life Insurance Policies

Shaun H. Ruff

Life is an incredible journey that everyone experiences differently. Throughout your existence, you will encounter many types of people and visit beautiful places. The Earth is a grand playground and understanding the fortune of life should not be taken for granted. Many people believe that death and taxes are the only two certainties in life. Both of these events must occur, but in the event of one’s passing, offspring and loved ones deal with the aftermath. For those planning for the future, universal life insurance policies are taken out to leave something material behind. There are numerous forms of life insurance policies, and universal life insurance policies have specific criteria.

Postponing Premium Payments

With most life insurance policies, premium payments must be made to ensure the validity of the policy. However, universal life insurance policies allow policyholders to remit premium payments if they cannot make them in time. These payments do not necessarily go into forbearance though. Instead, postponed payments are added to the overall value of the policy and attached to a specific interest rate. For those in a financial pinch, this could be a saving grace to keep the plan alive. Depending on the total value of the policy; this strategy may result in escalated premium payments over time.

Receiving Final Payouts

Policyholders must disclose all of the policy terms with family members before passing away. This point needs to be stressed because the amount of money you pay into your life insurance policy is not necessarily what will be paid out. Similarly to accounting inventory systems, policy benefits can be paid based on the most recent payments or the first payments made. Loved ones who are mourning the passing of an individual should also designate an executor for these unfortunate circumstances. Death is the completion of life and possessing a life insurance policy will hopefully ease some of this heavy burden.

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