Unbundled life insurance is a permanent life insurance policy where you also have a savings and investment component. You can use the savings and investments accounts while you are alive. After your death, your beneficiary receives a death benefit. This life insurance policy is also known as universal life insurance. To help you decide if this life insurance policy will suit your needs, below are the pros and cons of unbundled life insurance.
Pros of unbundled life insurance
- You can increase or reduce the value of the death benefit while you are alive and managing your policy.
- Your insurance policy will not end after you get to a certain age. It lasts until you die.
- Under an unbundled life insurance policy, you can grow your cash value.
- Your beneficiary will receive a death benefit after you die. Furthermore, if you wish, your beneficiary will receive a death benefit and any cash value you have after you die.
- You can change how often you pay your premium. By doing this, you can choose to pay a huge sum of money at once to cover your premium payments for a time.
- The insurance company breaks down the cost of life insurance to you to help you understand how insurance works.
Cons of unbundled life insurance
- If you wish to cancel your insurance policy, you will have to pay a fee.
- To increase the value of your policy, you will have to take medical tests. The tests are to show that you are in good health.
- Withdrawing from the savings of your policy will reduce your cash value.