Universal life insurance
is a variation of the Whole Life Insurance policy. The insurance
part of the policy is separated from the cash value portion of the
policy. The cash value portion is invested by the insurance company
in bonds, mortgages and money market funds. This cash value grows
and is tax-deferred. The cost of the death benefit is paid for out
of the investment fund. A guaranteed minimum interest rate applied
to the policy means that, no matter how badly the investments perform,
the insurance company guarantees a certain minimum return on the
cash portion.
If the insurance company does well with its investments,
the interest return on the cash portion will increase. Some contracts
offer zero or 25 basis point cost “loans” as withdrawals and under
Internal Revenue Codes could avoid income taxes.
You can vary the amount of your premium with Universal life insurance policies by using part of your accumulated earnings to cover part of the premium cost. You can also vary the amount of the death benefit.
IB&C offers an extended knowledge in
this field and we invite you to investigate this wonderful insurance
vehicle.
For more information on this insurance, contact us. |
