Understanding Universal Life Choices

There are four categories of universal life insurance, which are 1) standard non-guaranteed; 2) non-lapse guaranteed; 3) indexed, and; 4) variable. Be sure to talk with your agent at Castillo & Associates Insurance, serving Tucson, AZ and the surrounding area to get a full explanation of the details and help with all your life insurance needs.

Here is a brief explanation of the different types of universal life insurance.

Standard Non-Guaranteed Universal Life

This traditional form of universal life does not have a guaranteed level premium. Over time the premiums increase. It has a cash value and an interest rate return that adds to the cash value. It compares with term life insurance more than with whole life because most do not use this type of universal life policy as permanent insurance for the entire lifetime of the insured.

Non-Lapse Guaranteed Universal Life

This type of universal life is similar to the standard type in that it builds cash value over time and has an interest rate return that adds to the cash value. It differs from standard universal life in that the premiums are guaranteed to be level. This means that the premiums stay the same over the lifetime of the insured. If the guarantee premiums are paid, the policy is permanent life insurance and will pay benefits upon the death of the insured.

Indexed Universal Life

Indexed universal life can be guaranteed with level premiums or non-guaranteed like standard universal life. This type of universal life has an annual return and builds cash value over time. The return can be linked to the performance of a major stock index such as the S&P 500.

Variable Universal Life

Variable universal life is a non-guaranteed type of policy, which means the premiums may change. It has investment characteristics that allow the policyholder to make an investment allocation in certain mutual funds. The performance of this insurance is dependent on the underlying performance of the mutual funds owned through the policy.

To learn more and get a life insurance quote contact your agent at Castillo & Associates Insurance in Tucson, AZ by contacting us today.This entry was posted in Life Insurance and tagged Castillo & Associates InsuranceTucson AZ. Bookmark the permalink.

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