Alberta Life, Disability, and Health Insurance Since 1983

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Posted: 1 Dec '21

Is Universal Life Insurance an Option for You?

Is Universal Life Insurance an Option for You?

If you've considered taking out a life insurance policy, you'll want one that provides coverage for an extended period, especially for your family. A universal life insurance policy is long-lasting, affordable, and excellent if you're looking for an insurance plan that expands your estate planning. However, before you sign up for a life insurance policy, know all the facts. Call us today for expert advice.

What Is a Universal Life Insurance Policy?

A universal life insurance policy is a cover that lasts for your entire life. It's also called a cash value policy because part of your money goes into a savings account. As you continue to pay your monthly premiums, you build up your cash value, which you can take out as you would in a regular savings account.

With a universal life insurance policy, you pay a monthly premium, split into two parts. One part covers your life insurance, and the other half goes into your savings. Another key feature of a universal life insurance policy is that your premium is flexible.

As the policyholder, you can choose the amount you wish to pay within a given range. Usually, the policy provider sets a minimal amount depending on the cost of your insurance. Anything you pay above this minimum is added to your cash value.

Why does the cash value matter? Besides being able to withdraw the cash, it also grows. Your savings grow according to the minimum interest rate set by the insurance company or the market rates at the time. Alternatively, you can pay the maximum premium possible to grow your cash value. Remember, the wealth you grow through your universal life insurance is tax-free.

What Are the Types of Universal Life Insurance?

  • Indexed Life Insurance: This type of life insurance is linked to an index, such as the Dow Jones Industrial Average or Nasdaq. This means that the growth of your cash value depends on the index it's hinged to. So if the market is doing well, your cash value goes up and vice versa.
  • Guaranteed Universal Life: This life insurance policy has a consistent premium and interest rate. This is the least risky policy because the terms are set at the beginning of the policy. However, since the interest rate does not change with market performance, your cash value may stay low.
  • Variable Universal Life Insurance: This policy lets you put part of your savings into a mutual fund, where professional fund managers invest your cash for returns.

Get Universal Life Insurance in Edmonton Today

With so many variables, life insurance can be a little overwhelming. Your Vistaplan advisor will make sure that you understand all of your options before settling on a life insurance policy to ensure you are making the best choice. Call us today to speak to an advisor and find the best policy for your needs.


About the Author - David Motkoski

David Motkosk At the Helm of Vistaplan Financial Group

David is a well-respected insurance advisor with over 30 years of experience helping healthcare professionals, business owners, and their families secure their financial futures. He takes the time to make certain his clients understand the life, disability, and health insurance products they are purchasing, so they can make the right choices for their budgets, plans, and futures. CONNECT WITH ME ON LINKEDIN

Life & Disability Insurance for Alberta Health Care Professionals, Business Owners, and Their Families Since 1983