Tax Pros Investors: Which insurance policy is right for you?

Which insurance policy is right for you?

Here are some brief descriptions of popular insurance policies. The best things about these type of policies is that they combine insurance and investments to get capital appreciation. To find out which one is right for you and your family, consult your Tax Pros advisor.

Universal Life Insurance
Universal life insurance is also permanent insurance as long as you pay your premium. This type of insurance is different from term and whole. Universal life insurance premiums and death benefits can be adjusted. It can also be purchase with a level death benefit or an increasing death benefit. Universal life insurance gains cash value which can be used for a number of reasons. You can surrender this policy for its accumulated cash value, or take a loan. You can also use the cash value to pay the premium for a certain length of time.

Equity Index Universal Life Insurance
Equity Index Universal Life Insurance or (EIUL) is a version of universal life insurance. It has all the features of universal life insurance such as flexibility of premiums and death benefits. What is unique about EIUL is that the cash value growth is linked directly to the equity index growth; the percentage credits in the account depend on the percentage increase for an equity index. If the index goes down by the end of the policy year, a minimum guaranteed interest rate will still be credited to the cash account.

Variable Life Insurance
Variable life insurance is a permanent life insurance as long as premiums are paid. The premiums of a variable life insurance policy are designed to stay level over time. V.L.I.’s accumulate cash value on a tax deferred basis with a chance for higher returns than other life insurance policies. V.L.I.’s vary with the investment results of funds chosen by the policy holder. Unlike other cash value life insurance policy’s that guarantee the cash value, V.L.I. does not guarantee the cash value. This type of life insurance carries more risk than the traditional life insurance policy because the money is invested in stocks, bonds, and money market accounts.

Variable Universal Life Insurance
Variable Universal Life Insurance or (VULI) is a permanent life insurance policy as long as premiums are paid. The difference between (VLI) and (VULI) is that the policy owner has flexibility to change premiums and death benefits.

Related Articles
1) How EIUL works (includes diagrams)
2) EIUL Overview (text only)
3) What you need to know about Equity Based Insurance Products

For more information contact Tax Pros Investors.
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