Universal life insurance in depth

Saturday, July 01, 2023 05:00 AM - Comment(s)

Universal life insurance in depth

In addition to lifetime protection, universal life insurance offers a unique combination of benefits to help meet your needs, including:

Plan flexibility

You can change the protection level, how frequently you pay your premium or even the premium amount, as long as you remain within set boundaries.

Access to the cash value

If your needs change, you have the potential to build and borrow from the cash value while you’re alive.

Long-term care coverage

You have options for covering potential long-term care expenses — for help with things such as bathing, dressing, eating, food preparation and household cleaning.

Tax advantages

All life insurance products offer tax advantages, including a tax-free death benefit and tax-deferred cash value growth.

How does universal life insurance work?

A portion of your premium payment goes toward the insurance, which includes any fees and death benefit coverage.

The remainder of your premium payment adds to the policy’s cash value, which you can withdraw or borrow against.

There are several types of universal life insurance products, and the cash value growth rate in your policy — either a fixed rate set by your insurance company or a rate based on the performance of market indexes — will depend on the product you select. With a universal life insurance policy, you have the ability to withdraw or borrow against your cash value. If you pass away, the income tax-free death benefit will be paid to your beneficiaries.

Who may benefit from universal life insurance?

Universal life insurance is designed for people who are looking for:

Protection for your family in case of your premature death
Potential cash-value growth with tax advantages to use for things such as supplemental retirement income
Built-in flexibility, in case something happens and you need to adjust your premium or death benefit value
Options for covering long-term care expenses
A way to transfer wealth to future generations in a tax-efficient manner

Could universal life insurance be right for you?

See how it compares to other types of life insurance (e.g., universal life vs. whole life) to get a better idea of whether it meets your needs.

Indexed universal life

Cost-efficient death benefit protection with the potential for cash value accumulation that you can use to help meet a variety of planning needs.

Can offer permanent life insurance that’s designed to help protect your family today and enhance your cash value growth potential for the future

May provide cost-efficient death benefit to help assure a good value for your money, along with potential of cash value growth so you can plan for the future with confidence

Guaranteed universal life

Affordable, guaranteed protection that can be customized to meet your needs today, while still being flexible enough to evolve as your needs change.

Survivorship universal life

Permanent life insurance on two people that helps protect your family by paying a death benefit when the second insured passes away.

Linked-benefit universal life

A universal life insurance policy and long-term care coverage in one hybrid policy.

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