Universal Life Insurance

Universal Life Insurance: Pros and Cons

Pros	Cons
Flexible premiums and coverage	More expensive than term insurance
Cash value accumulation	Complex and may require monitoring
Tax-deferred growth	Surrender charges for early termination
Flexible death benefit	Interest rate fluctuations can affect returns
Potential for policy loans and withdrawals	Requires discipline to maintain the policy

Pros of Universal Life Insurance:

Flexible premiums and coverage: Universal life insurance allows you to adjust your premium payments and coverage amount, giving you more control over your policy based on changing financial circumstances.
Cash value accumulation: Part of your premium goes into a cash value account, which earns interest over time. This accumulated cash value can be used for policy loans or to pay premiums in the future.
Tax-deferred growth: The cash value in a universal life insurance policy grows tax-deferred, meaning you won't pay taxes on the gains until you withdraw or surrender the policy.
Flexible death benefit: You can often change the death benefit amount to suit your needs, which can be helpful if your financial situation or beneficiaries change.
Potential for policy loans and withdrawals: If needed, you can borrow against the cash value or make partial withdrawals from the policy, providing a source of accessible funds.

Cons of Universal Life Insurance:

More expensive than term insurance: Universal life insurance tends to have higher premiums compared to term insurance, making it less affordable for some individuals.
Complex and may require monitoring: Universal life insurance policies can be more intricate, and the cash value performance may require monitoring to ensure it remains on track to meet your goals.
Surrender charges for early termination: If you decide to surrender the policy early, you may face surrender charges, reducing the cash value available to you.
Interest rate fluctuations can affect returns: The interest earned on the cash value is not guaranteed and may fluctuate based on market conditions, potentially affecting the policy's returns.
Requires discipline to maintain the policy: Universal life insurance requires disciplined premium payments to keep the policy in force and maintain the cash value growth.

Conclusion:

Universal life insurance offers a range of benefits, including flexibility in premiums and coverage, cash value accumulation, and tax-deferred growth. It also provides the potential for policy loans and a flexible death benefit. However, it's essential to consider the higher cost, potential complexity, surrender charges, and interest rate fluctuations when evaluating whether universal life insurance is the right choice for your financial needs and goals.

Permanent Coverage

As long as premiums are paid on time, you have coverage for the rest of your lifetime with Universal Life Insurance.

Tax Advantages

Income tax-free death benefit, the potential for tax-deferred** cash value accumulation & income tax-free policy loans/ withdrawals.

Accelerated Death Benefits

Early access to a portion of your death benefit in the event of a terminal or chronic illness.

Flexible Premiums and Benefits

Unique option to change the premium payment amount, payment frequency and death benefit amount.

A universal life insurance policy:

It allows you to choose the amount of protection that best fits your needs. The key to universal life policy flexibility is the cash value. Each premium goes into the cash value and earns the current interest rate. This interest rate accumulates on a tax-deferred basis. The policy also offers a guaranteed minimum interest rate. Flexible death benefit amounts and premiums allow you to keep pace with today’s changing life circumstances while building tax-deferred cash value.

As the policy accumulates with cash value:

You can adjust the amount and the timing of premium payments depending on factors such as past premiums, policy values, and current interest rates. The policy remains in force as long as you have sufficient gas value in the policy to deduct the monthly cost of insurance, even if you skip premium payments.

Most Universal Life policies contain a surrender charge,

Usually during the first 10 to 20 years. This charge decreases each year until It vanishes. It applies if the policy is surrendered or last or reduced the face amount. With universal life insurance, you have flexible coverage. With universal life insurance, you can tailor a life insurance policy that fits your unique circumstances, protecting the lifestyle you and your family enjoy and addressing your specific financial plans.

With universal life insurance:

Your policy can be customized to begin and end when you want. With a flexible guarantee., you determine whether your policy is guaranteed for a certain number of years or to a specified age up to 121. You choose the combination that best fits your primary concerns. Universal life insurance provides a death benefit guarantee as long as your scheduled premiums are paid.

Universal life insurance offers a single, limited, or level pay option.

Issue ages or based on last birthday versus nearest birthday. It is essential to note the death benefit Guaranty could be affected by deviations from the scheduled premium, the timing of the premium payments, or specific transactions such as policy loans or partial withdrawals.

Universal Life vs. Whole Life Insurance
Whole and universal life are both forms of permanent life insurance, so they are similar in many respects. They offer a death benefit that lasts throughout your lifetime and cash value. However, whole life has a fixed coverage amount and a fixed premium payment that will never increase. Universal life has both more flexibility and more risk.
Universal Vs. Term Life Insurance
Term life and universal life are substantially different products. Universal life has a variable premium and death benefit amount, whereas the term is fixed; universal life is a permanent life insurance product that accumulates cash value, whereas term life only lasts for a certain period of time and only includes a death benefit. In essence, while term life is focused on simple, temporary protection, universal life is intended to provide a lifetime of flexible protection with some investment potential.
What Factors affect the Price
As with any other life insurance product, the price of universal life is affected by the death benefit amount and your predicted life expectancy. Some factors that we consider include your age, gender (women have a longer life expectancy than men), tobacco use, and overall health. A universal life policy will include a minimum and maximum premium amount, and you have the flexibility to choose a payment amount within that range.
Steps to Own a UL Policy
We complete this process in less than one month on average. You simply need to contact us to help you complete your application for review. We will contact you within a week if a medical examination or more questions are required. When all requirements are in, we evaluate your application; if approved, your insurance policy is then issued and delivered.