How Long Do You Pay Premiums For Universal Life Insurance

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How Long Do You Pay Premiums For Universal Life
Insurance?
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Introduction

• Universal Life Insurance is a tricky but flexible
  financial tool that offers not only life coverage
  but also a tax-advantaged investment. This
  insurance has been a choice for many Canadians,
  especially seniors. This blog seeks to take an
  in-depth view of what exactly Universal Life
  Insurance entails, with special concentration on
  how long one may expect to make premium payments
  into a policytaking into particular
  consideration those insuring themselves under
  Universal Life Insurance for seniors policy.
• Find Out What Is The Best Age To Buy Universal
  Life Insurance?

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What is Universal Life Insurance?

• Universal Life Insurance is a form of life
  insurance that combines an individual's life
  cover with savings. The policy consists of an
  account set aside for investment and which grows
  tax-deferred. The insurance company shall avail
  varying investment options to the policyholder,
  depending on the performance of the said
  investments.
• The Universal Life Insurance Policy, on its part,
  presents a flexible premium. This policy allows
  policyholders to adjust premium payments and
  death benefits within certain limits. This can
  make the attractiveness of such a policy
  overrated, but it is one reason, among many
  others, that it is an attractive option for many,
  including seniors who are looking to do estate
  planning or leave a legacy.
• Find Out What Are The Benefits Of Universal Life
  Insurance In Canada?

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Premium Payment Structure of Universal Life
Insurance

• In fact, one of the most important questions
  asked when considering a Universal Life Insurance
  Policy is just that how long does one have to
  pay the premiums? The period of premium payments
  for a universal life policy, therefore, may vary
  widely since it is not fixed, as with term life
  insurance, but ranges from ten, fifteen, or even
  longer years based on different factors,
  including terms of the policy, insurer, and
  choices made by the policy owner.
• Minimum and Maximum Premiums
• Flexible Payments
• Paying Premiums with Cash Value

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1. Minimum and Maximum Premiums Universal Life
   Insurance specifies both a minimum and maximum
   premium amount. The minimum is one of those where
   the person is paying the least, but at the same
   time, he should not allow the policy to lapse.
   However, this is restricted by the Life Insurance
   Act of Canada on the maximum amount of money that
   can be invested in a policy in order to save it
   from turning into a fundamentally investment-type
   vehicle.
2. Flexible Payments Flexibility in payment is one
   of the salient features of the Universal Life
   Insurance Policy. One can pay more than the
   minimum premium at his discretion to enhance the
   cash value of the policy. The policy's relatively
   successful investments will, therefore, avail the
   policyholder the possibility of benefiting from
   the tax-deferred growth that is being realized
   within the policy.
3. Paying Premiums with Cash Value One of the
   strategies that prove very helpful for senior
   citizens is the use of the accumulated cash value
   in paying premiums. In this way, the investments
   may as well have recorded great performance,
   because the cash value could have grown so much
   to take care of the amount required for premiums.
   This could mean that after some time, the
   policyholder might be completely unable to stop
   paying out-of-pocket premiums as the policy
   starts paying for itself.

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Universal Life Insurance for Seniors

• There are so many reasons why Universal Life
  Insurance for seniors is so attractive. Seniors,
  being in their sunset years, very often look at
  the financial legacy they will leave behind,
  possibly serving dual and multiple needs
• Estate Planning The death benefit can be used to
  pay estate taxes and financially support heirs.
• Income Replacement The death benefit provides a
  form of income replacement for seniors with
  dependents.
• Accumulation of Wealth The investment feature
  would allow seniors to develop or increase their
  wealth over time, an important feature in
  retirement planning.
• This is particularly useful for senior citizens,
  who would have substantial cash reserves but
  lesser regular income during their retirement, as
  this would allow them the flexibility of paying
  premiums out of the cash value of the policy.

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When Can You Stop Paying Premiums?

• Universal Life Insurance premiums may be paid
  over a period that differs. Some policies are
  written in such a way that premium payments can
  stop after the policyholder reaches a certain age
  or after the cash value rises to an amount
  considered adequate in the settlement of the cost
  of the insurance. The extent to which a client
  may cease to pay premiums yet still remain with a
  policy that is in force at some level will
  largely depend on how his or her policy
  investments are performing and how much has been
  paid into the policy over time.
• This would, therefore, mean that there is a
  realistic pathway of reducing or even eliminating
  premium payments with time, especially if a
  senior has managed the wise investments their
  policy needed and made higher contributions in
  the earlier years.
• Find Out How Long Do You Pay Premiums For
  Universal Life Insurance?

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The End

• Universal Life Insurance is an excellent tool for
  Canadians' financial and estate plans,
  flexibility, the opportunity for investment, and
  lifelong coverage. For seniors, it involves
  understanding how, when, and the ability to pay
  premiums, part and parcel in managing retirement
  finances and legacy planning.
• Whether it is the question of buying Universal
  Life Insurance for yourself or an elderly family
  member, the best suggestion will always be to
  refer the issue to a financial advisor or an
  insurance expert. They can also assist you in the
  drafting of a policy best suited to your specific
  financial goals and needs that will, in turn,
  allow you to make the most out of this versatile
  insurance product.

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Canadian LIC Contact Details
Office 1 416 543-9000 E-mail
info_at_CanadianLIC.com