4 Factors that Affect the Cash Values of Universal Life Insurance

4 Factors that Affect the Cash Values of Universal Life Insurance

Selecting the best cash-value life insurance policy is a difficult task involving a number of complicated concepts. However, because the amount insurers credit to cash values on UL policies is a critical element of the overall cost of the protection, one primary area of focus should be how the company determines the amount it credits […]

Fees and Acquisition Costs of Universal Life Insurance

Fees and Acquisition Costs of Universal Life Insurance

Universal Life (UL) policies charge front-end and/or back-end loads or surrender charges to recoup commissions paid to the selling agent and the expense of issuing the policy. Originally, UL policies were front-end loaded, but now most policies are issued with little or no front-end load. In other words, the insurer credits the policyowner’s entire premium […]

5 Alternatives to Universal Life Insurance

5 Alternatives to Universal Life Insurance

Insurers and policyowners can configure a UL policy’s premium payments and death benefits to resemble virtually any type of life insurance policy, from annually-renewable term to single premium whole life. Consequently, any other type of policy that meets a policyowner’s needs is a suitable and, perhaps, preferable alternative if the policyowner does not need the […]

Tax Implications of Universal Life Insurance

Tax Implications of Universal Life Insurance

An important exception to the general cost-recovery rule applies for withdrawals within the first fifteen years after the policy issue date that are coupled with reductions in death benefits. Because insurers generally reduce death benefits in an amount equal to any withdrawal of cash values, policyowner withdrawals frequently may trigger a tax on all or […]

6 Disadvantages of Universal Life Insurance

6 Disadvantages of Universal Life Insurance

Understanding the disadvantages of universal life (UL) insurance helps consumers make the most educated decision. Here are the 6 major disadvantages that should be considered when considering universal life: The flexibility associated with premium payments can be a disadvantage because policyowners can too easily allow their policies to lapse. There is no forced savings feature, […]

12 Advantages of Universal Life Insurance

12 Advantages of Universal Life Insurance

Understanding the advantages of universal life insurance helps consumers make the most educated decision. Here are the 12 major advantages that should be considered when considering universal life: The policyowner has wide discretion or flexibility in selecting the premiums that they pay. Provided that the policy has enough cash value to cover mortality charges, the […]

3 Instances in Which to Consider Universal Life Insurance

3 Instances in which to Consider Universal Life Insurance

Potential policyowners may consider UL for any life insurance need. Initially, the insurer and policyowner may configure a UL policy’s death benefit and target premium level to resemble virtually any type of life insurance policy from annually renewable term insurance to single premium whole life. However, because of policy costs, UL generally is best suited […]

A Basic Introduction to Universal Life Insurance

A Basic Introduction to Universal Life Insurance

Universal Life (UL) is a “flexible premium” “current assumption” “adjustable death benefit” type of cash value life insurance. The term flexible premium means the policyowner is permitted to select whatever premium he or she wishes to pay—within limits—and later to adjust or change the premium. Policyowners may even skip premium payments as long as the […]