In the present world of remarkable unpredictability, all of us crave to have some assurance – one that gives us a feeling of control over our lives, specifically, our future. People of Hong Kong and China have invariably chosen Universal Life Insurance as their preferred policy option to provide stability and happiness to their forthcoming days for a variety of reasons. In this write-up, we will discuss some of them, while giving a general overview on what makes Universal life in Hong Kong & China the most preferred insurance option.
Working of Universal Life insurance
The amount paid for a universal life insurance serves a three-pronged structure.
- Payment for the cost of insurance
A specific portion of premium payments can be used to pay for the insurance cover being provided, if the policyholder is unable to pay due to any reason.
- Invest in market options as per your preferences
This is where your money can grow leaps and bounds as you invest it in the favorable market options like securities, mutual funds etc. and create a portfolio that generates good dividends. As long as the money stays in the policy, the enhancement of the cash value is tax-deferred as well.
- Administration charge
This portion is dedicated to provide for the miscellaneous costs like settlement, estate planning etc. in the event of death or maturity of the policy.
Benefits of Universal Life Insurance
- Cash value generation
This policy results in a lot of cash value enhancement as it gives the option of investing in the market for dividend earning. A risk taker can choose to increase his liquidity through the market, and a risk adverse policy holder in Hong Kong and China is guaranteed a minimum return of 4%. Additionally, the holder can borrow against the accumulated funds or withdraw from it.
- Flexible premium payments
The policy holder can choose the amount and the time period after which the premiums are to be paid. They can also opt to pay premiums in advance when the fund flow is good as a cushion for harder times.
- Wealth formation
The assurance of receiving an amount that is much higher than the fund invested helps you to plan the inheritance of your assets in a judicious manner, so that none of your beneficiaries feel let down. Also, the continuance of the policy and the facility to be able to avail loan on it ensures a stress-free retired life.
- Survival of business
Sometimes joint-venture companies are at the risk of losing their business if any unfortunate incident happens to either of the partners or their successors are unwilling to be a part of it. In such a situation, A Universal Life Insurance policy bought by each of the partners will ensure that the surviving partner is able to buy back most of the shares and ensure that the business does not cease to exist. In case of shut down of the business, the premiums will generate a fixed return. The premium payments are also tax-deductible.
Choosing a universal life insurance plan that serves your needs guarantees a life well lived, even after death. To learn more about Universal life in Hong Kong & China, get in touch with a reliable insurance company.