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.
  

2nd to Die - Survivorship

A type of life insurance on two people (usually married) that provides benefits to the heirs only after the last surviving spouse dies. This differs from regular life insurance because the surviving partner doesn't receive any benefits after their spouse dies. This type of insurance can be an effective estate planning tool.

• For individuals who expect that large estate taxes can be assessed on the death of the second spouse, survivorship life insurance can be a smart estate planning tool. By providing a death benefit upon the death of the surviving insured, survivorship policies can be used to pay estate taxes and other expenses at the death of the second spouse.
• Survivorship insurance may be a good strategy in cases where one member of a couple is in less than good health, making other types of insurance extremely expensive for that individual. Since two lives are insured in this type of policy, premiums for survivorship life policies are relatively low compared to individual policies on each spouse’s life because the insurance cost is not based solely on the individual in less than perfect health. Therefore, if the other spouse is in reasonably good health, the couple can usually obtain survivorship life insurance.