Illustrations

RESOURCES - Life - universal life
Overview

Universal Life offers the ability to be flexible with the timing and amount of premium payments. It does not guarantee cash value or death benefits.

• Premium payments are flexible. After initial payment, you make additional premium payments at virtually any time and in any amount (subject to certain minimums and maximums).
• Your policy can continue in force as long as there is enough cash value to cover the minimum monthly insurance expense.
• Cash value accumulates interest at a rate set periodically by the effective insurance company and is typically guaranteed not to drop below a certain level.
• Death Benefit Options
  1. Level Death Benefit: equals the policies original death benefit for the life of the policy.
  2. Increasing Death Benefit: equals the policies original face amount plus any existing policy account value.

Potential Advantages

• Client can determine premium amount and timing, within limits, allowing flexibility.
• Client can increase or decrease the face amount.

Potential Disadvantages

• Ignoring premium payments can lead to policy funding problems if there is insufficient cash value in the policy.
• Adding guaranteed riders or features (No Lapse Guarantee or Lapse Protection Rider) can increase the cost of Universal Life.