UNIVERSAL LIFE INSURANCE
Universal Life insurance is permanent, flexible life insurance plan that lasts a lifetime or the life of the policy.
A universal life policy lets you build cash value, akin a whole life policy. It offers flexible premium payments, death benefits and schedules to fit your life and budget. Making it easy to protect your family with great coverage
Universal Life Insurance
Universal life insurance is a type of permanent life insurance policy that is generally more affordable than other options. In addition to providing a death benefit, universal life insurance also provides flexible premiums and a cash value savings component. This can be used to supplement income and pay expenses. For many, providing an available source of income for grieving loved ones after death is a necessity.
Benefits of Fixed Annuities
- Guaranteed income stream for life
- Diversification Insurance portfolio
- Principle is secure (zero floor plan)
- Predictable earnings
- Tax-deffered income growth
Why This Product May Benefit You
Universal life insurance may be the right choice if you want…
- Coverage that can last your entire life.
- The chance to build cash value. This grows tax-deferred, and can be used later for other financial goals.
- The option to adjust the amount of life insurance protection you want (within limits).
- Flexible premiums — you control the amount and frequency of your payments. (Note: the amount and timing of your payments will directly affect your policy’s cash value, as well as your ability to maintain coverage in the future. Your policy’s cash value will increase quicker if you pay a higher premium in the early years and you make regular payments.)
Traditional / Non-Guaranteed
“unbundled” product, which means that mortality expenses, interest rate, and other expenses are factored in to calculate premium rates and cash values. This offers flexibility in making your premium payments, it can work against you as most life insurance agents sell this policy at the lowest allowable premium only, rather than the insurance companies’ guideline premium.
Because traditional universal life is a non-guaranteed product, it can end up costing you a fortune (in the form of not having life insurance when you need it most, as well as income tax consequences of cancelling your policy, such as phantom income tax) if your policy is dropped (lapsed or cancelled) because of not having sufficient cash value or lack of further higher premiums.
No Lapse Guaranteed
This is a traditional or non-guaranteed universal life policy except your premium is guaranteed never to increase. As long as that guaranteed premium is paid on time, your death benefit will always be always in force. Guaranteed universal life is a fairly recent invention, and it is popular, because it functions as your life-long term policy or term life without expiration and with fixed premiums. This is a great universal life policy for anybody who is at least 55 years old and looking for life insurance for the rest of life with minimum fixed premiums. This policy can be used for estate tax liquidity, final expenses, a legacy for the next generation, or any other permanent life insurance need.
Indexed Universal Life Insurance
Indexed Universal life can be guaranteed or non guaranteed with an option to tie your return to a major stock market index like the S&P 500 (or some other domestic/international stock market indexes). Interest crediting goes up and down in lockstep with the index. Non guaranteed equity indexed universal life policies have similar drawbacks to non-guaranteed universal life. New guaranteed indexed universal life is a better option as it provides an opportunity to earn better interest rate with few guarantees. In all types of universal life – the no lapse guaranteed universal life policy is the best option if you are looking for permanent life insurance benefit with cash value growth.
Variable Universal Life
The variable universal life is very similar to traditional universal life or non-guaranteed indexed universal life. In this policy, you can invest in the stock market (mainly various kind of mutual funds) directly rather than just to tie to a stock market index. The investments inside the variable universal life insurance policy are called separate accounts. You can invest and manage variety of mutual funds inside the policy, and the performance of a VUL policy will depend on the performance of these mutual funds. The variable universal life insurance (VUL) policy has all the drawbacks of non-guaranteed universal life insurance policies. We regularly receive calls from the people who have bought this policy when the stock market was on top and now lost most of the cash value in their policy and required to pay a premium again. We feel that this policy is a ticking time bomb and no way you can win with this policy. Only way you can win with this policy is if you die sooner and your policy is still in force.
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