
		Universal Life Insurance


	Universal Life Insurance

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Universal Life insurance:

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When it comes to life insurance there are many different types of life insurance policies available such as term life insurance, whole life insurance, and universal life insurance policies.

What is Universal Life Insurance?

Universal life insurance is a flexible premium, adjustable death benefit type of life insurance policy. The attraction of a universal life policy is that premiums may be flexible, the death benefit may be increased, decreased, cash value may build up in the policy, and the universal life insurance policy may be designed to last a certain number of years or to last a lifetime.

Understanding Universal Life Insurance

Universal life insurance is not for everyone. In fact, if your life insurance needs are short term, a term life insurance policy may be your best option and will cost you less money than a universal life insurance policy.

A universal life policy is worth looking at when you like the idea of a permanent life insurance policy, you would like cash value to build up, and you're looking for a life insurance policy to last as long as you live.

Another reason why universal life insurance may be attractive to you is if you have a health issue and need an impaired risk life insurance policy. Many life insurance companies are more aggressive with their underwriting offers if you are considering universal life insurance vs term life insurance.

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When you consider a universal life insurance policy, your agent should give you a complete illustration for your review. Typically these illustrations will be 5-10 pages long, will describe how the universal life insurance policy works, will illustrate the guarantees and assumptions of the policy and will indicate any riders or additional features available.

Universal Life Insurance Illustrations

IMPORTANT - If you are considering a universal life insurance policy, your agent should give you a full illustration. These illustrations will typically be 5-10 pages long and will contain information on the underwriting rate class quoted, your age, the death benefit amount, proposed premium payments - both the amount and duration, any riders that may be part of the policy, guaranteed as well as non-guaranteed features of the policy, etc. (more detail below)

When looking at your illustration, you should see 2 columns on your illustration - One will indicate how the policy will perform based on the guarantees of the policy, and the other column will indicate how the policy will perform based on the non-guaranteed assumptions of the policy. Look carefully to know what you are buying.

Universal Life Insurance Features

Guarantees & Assumptions - With universal life insurance policies, there are guaranteed features as well as non-guaranteed features of a policy. For example, universal life insurance policies provide a guaranteed interest rate that will be credited to your cash values, and a non-guaranteed interest rate based on current economic conditions. The non-guaranteed interest rate will change each policy year. In addition, universal life policies charge cost of insurance and administrative fees as part of a universal life insurance policy. There are guaranteed maximum cost of insurance charges and administrative costs as well as current cost of insurance and admin expenses. These will vary over time subject to the guaranteed maximums.

Death Benefit - The death benefit of a universal life insurance policy may be a level fixed death benefit or an increasing death benefit. Some of the universal life insurance policies available also offer a return of premium feature with their policies.

As with most universal life insurance policies, the death benefit may be increased (subject to additional underwriting) or decreased. The illustration should indicate if the policy is a level death benefit, an increasing death benefit, or an increasing death benefit with a return of premium feature.

How long does your policy last? - On the illustration, you will see that the death benefit lasts for a certain number of years based on the guarantees, and may last longer based on the policy assumptions. Take a look to see how long your death benefit lasts.

Premiums - The illustration will indicate the proposed premium for the universal life insurance policy. Understand that the premium payment is based on the underwriting rate class proposed. You have to qualify for the rate class proposed.

The illustration indicates the number of years that you need to pay premiums, the amount of premium, whether the premium increases or decreases over time. The illustration will indicate if you have to pay premiums in all years, or if you only pay for a certain number of years. Since universal life insurance is flexible with premiums, you can ask for illustrations based on paying for "x" number of years, decreasing premiums over time, increasing premiums over time, etc.. Your agent should tell you about the options available.

Cash Value - One of the features of a universal life insurance policy is the potential for cash value to build up in the universal life insurance policy over time. When you review your illustration, look at both the guaranteed cash values as well as the non-guaranteed or assumed cash values. Understand that your cash values will vary over time from the illustration but will not be less than the guarantees of the universal life insurance policy.

Loans - As the cash value of your policy builds over time, it may be possible to access the cash values of your policy by taking loans against the cash values. Each life insurance company has its own rules as far as how much is available by loan from a policy, the loan interest rate charged, repayment of loans, etc.. Loan features of a universal life insurance policy may be helpful but you need to know upfront the impact of loans on your policy.

Riders - Many universal life insurance policies offer multiple riders such as no lapse guarantees, critical illness riders, long term care riders and much more.

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How to Shop for Universal Life Insurance

Work with an independent agent. An independent agent can show you multiple insurance companies universal life insurance policies vs a career agent that only represents one company.
Discuss your medical information in detail with the agent so that any quotes you receive will be accurate. Keep in mind that only the insurance company may determine your rate, but a good agent should be able to provide accurate quotes to you. The following will give you some guidance about life insurance underwriting. Life insurance underwriting
Understand the guarantees and non-guarantees of the policy. The guarantees tell you what you get for your money, and the non-guarantees tell you what you get if the assumptions hold true. Know the difference.
Dont Rush - It's complicated. You should be able to take some time to review the illustrations and ask questions. If you don't understand something ask for clarification. It is also easy for the agent to prepare multiple illustrations with various scenarios illustrated.
Features - If you have interest in some of the riders available such as critical illness or long term care, ask to see illustrations with and without these riders so you understand the cost of these riders.

Please take a few minutes to submit your request for life insurance information. There is never any pressure or obligation with the service and life insurance quotes are always FREE.

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Call us today at Toll Free (800) 909-2040. Thank you.

The information contained on this website is meant to inform you about how medical issues affect your life insurance rates. This information is not meant to replace your physician's advice. Always consult your physician for medical advice.

If You have health issues, it is important that we know about those health issues in order to provide you with the most accurate term life insurance quotes possible. You will find more information here about health issues such as:

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