Steps To Increase Your Universal Life Insurance Benefits
2 min read
Universal life insurance is a flexible and versatile option that combines life coverage with a cash value component. To increase the benefits of your universal life insurance policy, consider the following steps to improve its growth and overall value.
Review your policy regularly:
Regularly reviewing your universal life insurance policy is important to ensure it meets your current financial needs and goals. Assess the performance of the cash value component, the adequacy of your coverage, and any changes in premium payments or death benefits. Periodic reviews allow you to make necessary adjustments, ensuring that the policy continues to align with your evolving needs.
Increase premium payments:
One effective way to boost the cash value of your universal life insurance policy is by increasing your premium payments. By contributing more than the minimum required premium, you improve the policy’s cash value growth and also improve the policy’s long-term performance. Increased premiums can lead to higher returns and provide additional financial security.
Make additional deposits:
Most universal life insurance policies allow for additional deposits beyond the regular premiums. These extra contributions can significantly increase the cash value of your policy. Consider making lump-sum deposits when possible, especially if you experience a financial windfall or have surplus funds. These additional deposits can improve the growth of your policy’s cash value.
Adjust the death benefit:
Adjusting the death benefit can impact your policy’s cash value growth. Many universal life insurance policies offer the option to increase or decrease the death benefit amount. Increasing the death benefit generally requires a higher premium, but it can improve the policy’s overall value and provide greater protection for your beneficiaries. Conversely, decreasing the death benefit may lower your premiums and allow more of your payments to go towards cash value accumulation.
Take advantage of policy loans:
Universal life insurance policies often allow you to take out loans against the cash value of the policy. Using policy loans strategically can help you utilize the policy’s value for various needs, such as investments or emergencies. However, be cautious with policy loans, as unpaid loans and interest can reduce the death benefit and cash value. Ensure you understand the terms and impact of borrowing against your policy.
