The Major Issue With Universal Live Insurance
As the rise of universal life insurance premiums is affecting people’s ability to pay for them, more and more individuals are considering life settlements. Life insurance is there to protect loved ones in the case that something was to happen to the policyholder. Although there are tremendous benefits to holding a policy, there are several drawbacks as well. With premiums predicted to increase even more in the coming years, policyholders are becoming more and more interested in a life settlement.
What Is Universal Life Insurance?
This type of life insurance is a hybrid of two types of insurances: it combines the affordable aspects of ‘term insurance’ with the savings factor of a ‘whole life’ policy. Universal life insurance offers the policyholder a cash savings account that exempts them from paying tax on the interest that the policy earns. It also gives them the complaisance to fine-tune the premium as well as the ability to modify the death benefits.
The beneficial thing about universal life insurance is that the amount that is invested accumulates interest which can be very lucrative when interest rates are high. On the other hand, they can yield the bare minimum when rates are low.
Life Insurance Premiums Are Increasing Over 200%
Over the course of several years, countless universal life insurance policyholders have been experiencing continuously increasing monthly premiums.
This poses a huge problem for those who are retired as well as those who are on fixed incomes. Many may have no choice but to surrender the policy or simply allow it to lapse. If this is the case, these policyholders would not receive a death benefit payout; something that they were counting on since the day they purchased their policy. There is another option available to individuals who fit in this category, as that is to opt for a life settlement.
How Policy Holders Are Reacting
Not only are policyholders upset about the premium increase, but they are also looking for a means to get rid of their policy. Selling your life insurance policy for a life settlement is one of the best ways to make use of a policy that is no longer affordable.