Adjustable Life Insurance Illinois IL
Reader Question:
Hi. With so many life insurance products available here in Illinois, I am getting rather confused. What is adjustable life insurance?
Dale
Chicago, IL
Dale, you’re right. It is really hard to keep track of what’s available in the market. We don’t want to pass up a great investment opportunity, do we? Especially when we have money to pay for it.
Basically, adjustable life insurance is just another name for universal life insurance. A universal life insurance is characterized by flexible premiums, which has two components. One part of your money goes to premium payments, and the other is for the build-up value or the investment part.
Let’s say that the portion of the investment part has already grown. You can then use then use the amount built up for payment of premiums. The performance of the investment part, therefore, will determine the flexibility of your premium payments.
The second feature of a universal or adjustable insurance is it has a cash value. This is the accumulated portion of the premiums you invested. Since it is a cash value, you can withdraw it anytime you want. However, though you have the power to decide where to invest the money, you are restricted only to safe low-yielding financial instruments.
On the other hand, with a variable life insurance, another kind of a universal life insurance, you can be allowed to invest in the stock market and bonds market, which can give potential higher rates of return. When it comes to death benefit, your universal insurance policy also is tax free. However, the accumulated portion of your investment part of the investible fund, assuming it has grown, will be taxable.
So, Dale, call your life insurance agent in Illinois and ask him for more details.
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