Universal life insurance offers policy owners the flexibility to choose both the amount of insurance and the premium to be paid with a range of potential premiums.  Generally speaking, universal life insurance is considered an affordable way to secure a lifetime of coverage.

Features of Universal Life

• As needs change, the amount of coverage and premium paid may be adjusted, subject to certain limitations.

• Premiums are generally less than whole life, but more than term, when buying primarily for the purpose of having permanent life insurance protections.

• Premiums may be adjusted to fill the cash value account in situations where a tax sheltered investment strategy is called for (usually for executive compensation or for households with income regularly over $170,000 per year).

• Premium payments are credited to a cash value account where the policy earns tax-deferred interest at a rate set by the company, which may be higher than the minimum rate guaranteed in the policy.

• The policy expenses and cost of insurance charges are deducted monthly from this cash value account. Generally, cash values can be accessed by the policy owner through policy loans and withdrawals (charges may apply).

Universal life is most useful when policy owners are seeking to buy a large amount of life insurance and have somewhat unpredicatable cash flows, such as with a business. 

A newer universal life innovation allows a policy owner to in essence create a "term like" cash value policy that can last permanently.  These policies are a hybrid between term life and whole life.  These types of policies have premiums that are more than term life, but less than whole life.  As long as the premium is paid, the death benefit stays in force regardless of interest rate changes.  There is a small amount of cash value in these policies, however, only enough to keep the policies in compliance with various regulations for permanent policies.

Contact us to discuss your options.