Do You Know the Right Age to Start Thinking About Universal Life Insurance Policies?
Universal life insurance is a flexible type of life insurance that combines a term life policy with an investment savings component (cash value). This hybrid type of life insurance allows you to build wealth over time while ensuring that you have sufficient life insurance coverage in place. But what is the best age to purchase a universal life policy? Below are a few important points to consider when determining the best time to buy universal life insurance.
How Universal Life Insurance Works
Before deciding on the best age to purchase universal life insurance, it's important to understand how universal life insurance policies work. Unlike term life insurance, universal life insurance policies have a long-term investment portion that allows you to build a cash value through part of your monthly premiums. This cash portion of the policy can be cashed out and used to anything you wish, whether it's putting a down payment on a new home or starting a business. Over time, the cash value portion of your universal life insurance policy may even grow large enough to offset the cost of the monthly premium, providing you with free coverage for as long as the policy is in effect.
The Best Age to Get Universal Life Insurance
Since universal life insurance policies are designed to be savings vehicles, allowing policyholders to build assets and wealth over time, it's generally recommended to purchase universal life insurance policies earlier in life than later. Purchasing life insurance in your 20s or early 30s will allow you more time to build your wealth by the time you take on the responsibility of a family. That said, the decision on when to purchase life insurance will depend on your personal circumstances. Regardless of your age, it's important to consider your long-term financial goals and how universal life insurance policies fit into your overall strategy.
Life insurance policies require not only forethought, but solid financial planning. Contact an insurance specialist today for more information about how universal life insurance policies can help you build wealth and security.