If you want to live better today while protecting your whole family from any dangers, variable universal life insurance can help. But it’s not your typical life insurance, as it gives you the ability to direct your premiums and get higher returns.
If you are thinking about getting variable universal life insurance in Michigan, here is what you need to know.
What is Variable Universal Life Insurance?
VUL, or variable universal life insurance, is a permanent life policy that includes a savings component. This component allows cash value investments. Similar to typical universal life insurance, this policy has a flexible premium. Variable universal life insurance also has a minimum floor and a maximum cap that go along the savings aspect.
How Variable Universal Life Insurance Works
Similar to standard universal life insurance, variable universal life insurance has a death benefit and a savings component. This gives holders more flexibility in how they want to maintain their policies. All of the premiums are directly paid on the savings component.
With this insurance, the savings component has several subaccounts. The insurer deducts the amount required for administrative costs and mortality coverage yearly. The remaining investment remains in those subaccounts where they can earn on interest.
If the policyholder dies, beneficiaries will receive all the benefits made available through the policy. When getting a VUL policy in Michigan, you can structure it in different ways. Depending on the structure of the policy, benefits can sometimes be taxable.
With a VUL policy, all of the payments are split into two pieces. A portion goes into the insurance benefit, and the rest is invested for potential growth. With Michigan variable universal life insurance policies, holders have the freedom to invest in any available options.
Key Points of Variable Universal Life Insurance
- With each payment made, the cash value increases.
- All of the investments made by the holder and their cash value fluctuate based on the value of investment options.
- Holders pay automatically for the insurance benefit. A percentage of cash value is taken each month for policy charges and any other added benefits the holder has selected.
- Policyholders can accumulate cash value and build equity. This equity is available to holders through withdrawals or loans and can be used for achieving various financial goals.
Variable Universal Life Insurance Benefits
To get the best variable universal life insurance, you will have to look carefully for reliable insurance providers in Michigan. The conditions can vary from one insurer to another. However, despite these factors, you can count on certain benefits no matter who your insurer might be.
- As long as the policyholder makes all minimum payments and in the desired timeline, they are guaranteed a fixed death benefit. Simply put, it can’t decrease like with some other life insurance policies.
- All Michigan variable universal life insurance policy providers give you the option to adjust your maximum and minimum premium payments. This makes it easy to adjust the policy according to your financial capabilities and increase its value over time.
- Some of the best variable universal life insurance policy plans can give holders huge returns compared to other life insurance policies.
- VUL policies give holders the ability to control their cash value and how their investment is being handled.
- Policyholders can control their risk tolerance in a better way.
Things to Consider When Getting a VUL Policy in Michigan
A universal life insurance policy gives you the ability to grow your cash value significantly. However, its value can also be decreased if you choose an investment option with poor performance. This is why it’s essential to learn as much as possible about investments and work out a thorough plan.
Variable Universal Life Insurance with Melton McFadden
VUL policies are also more complex than most other life insurance policies. You need to understand all the factors and monitor the performance of your insurance. If you need help understanding and getting a variable universal life insurance policy, please contact us.