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PTP Insurance
Agents of Naperville, IL, an independent insurance agency
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What is Universal Life Insurance?
 Universal
Life is a type of permanent life insurance that applies premium
payments above the cost of insurance to the cash value of the
policy. This cash value earns interest each month; and, in the
event no payment is made for any given month, the money due is
subtracted from the cash value and applied toward the cost of
insurance. The interest rate used to calculate interest earned
is usually pegged to a financial index. Universal Life insurance
policies are considered to be a stable investment because only
the amount of interest earned varies while the cash value does
not. Another type of universal life insurance is known as variable
universal life insurance which allows the cash value to be divested
into a number of separate accounts. Because these funds can be
invested in stocks or bonds there is greater risk since the value
of the underlying securities fluctuate. However, for the same
reason, there is greater potential reward.
How is Universal Life Insurance
used?
Universal Life Insurance is
way to purchase life insurance that also has a tax-advantaged
way to accumulate savings. Since the actual cost of annual insurance
is relatively low in the early years of a contract, the premium
paid far exceeds the actual cost of insurances. As long as the
policy remains in force, these excess funds (cash value) will
grow tax-deferred. In fact, this cash value will escape
taxation entirely if the policy is held until death because you
paid the premium with after-tax money.
What are the types of Universal
Life Insurance?
- Single Premium
Single Premium Universal Life Insurance is paid for with a single,
large, initial payment. As long as the cost of insurance charges
has not depleted the cash value, the policy will remain in force.
- Fixed Premium
Fixed Premium Universal Life Insurance is paid for with periodic
fixed payments, usually monthly or annually. Since these payments
will exceed the actual cost of insurance, the policy is typically
paid up in a relatively short period of time. This approach may
be attractive to an individual who operates on a fixed payment
budget and also wishes to stop paying premiums after retirement.
- Flexible Premium
Flexible Premium Universal Life Insurance allows the policyholder
to vary payments each time a premium is due. As long as there
is sufficient cash value in the account to pay for the actual
cost of insurance, the policyholder can even skip payments due.
People with fluctuations in income (like those who depend on
commissions) usually find this option attractive.
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People
to People Insurance Services Inc. - 1240 Iroquois, Naperville, IL, DuPage County - Serving Chicagoland (630) 355-2355 |
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Naperville Illinois personal and commercial independent insurance agents, PTP Insurance Agency, serves clients throughout
the metropolitan Chicagoland area which includes Cook County, DuPage County, Kane County, Kendall County and Will County;
including, but not limited to, Naperville, Bolingbrook, Plainfield, Aurora, Batavia, Barrington, Berwyn,
Bedford Park, Bloomingdale, Brookfield, Burbank, Burr Ridge, Carol Stream, Chicago, Clarendon Hills, Countryside,
Darien, Downers Grove, Elgin, Elmhurst Glen Ellyn, Glendale Heights, Hickory Hills, Hoffman Estates, LaGrange,
LaGrange Park, Lemont, Lisle, Lockport, Lombard, Lyons, Mokena, Montgomery, Oak Brook, Oswego, Romeoville,
St Charles, Schaumburg, Shorewood, Sycamore, Warrenville,West Chicago, Westmont, Woodridge and Yorkville.
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