By using the answers to a few simple questions, a universal life insurance calculator can help you make informed decisions about the future. It might be impossible to know when your family will need life insurance, but it’s easy to begin taking steps toward securing their future.
In exchange for regular payments, life insurance policy holders are delivered a lump-sum payment to beneficiaries in the event of a loved one’s death. Life insurance is chosen based on the needs of the owner, and comes in many different forms. Term life insurance offers protection for a set period of time, while whole and universal life insurance accumulate money throughout your lifetime. Universal life insurance is popular because it offers more flexibility than other options.
What Exactly is Universal Life Insurance?
Universal life insurance is a type of permanent life insurance that offers variability in premiums. While whole life insurance requires you to pay a fixed rate each month, universal life insurance grants you the option to pay above the minimum amount required, creating a fund that can either be used to make future payments or receive tax-free loans. Universal life insurance policies are also able to provide policyholders with higher interest rates month-to-month, unlike whole life insurance, which uses a fixed interest rate determined at the time of purchase.
While the amount you put into your universal life insurance in addition to the minimum payment is entirely up to you, the factors that determine the minimum payment should only be decided by way of careful examination. To arrive at a decision, you should ask yourself the following questions:
- How much will be needed at the time of death to cover immediate costs?
- How much future income is needed to support my family after I’m gone?
- How many years into the future will my family need support?
A universal life insurance calculator will ask these questions, along with a few more, in order to determine exactly how much insurance you may need to purchase. By crunching the numbers you provide, this handy tool can make accurate estimations about your life insurance needs. Of course, the numbers it provides should only cover the modal premium - how much additional money you wish to supplement your policy will likely be based upon your future need for tax-free loans.
A universal life insurance calculator might steer you in the right direction, but HealthMarkets Insurance Agency can guide you towards your destination. Since 2010, we have helped Americans enroll in more than 1.4 million insurance policies. For answers beyond estimations, find a local agent today.