Universal Life Insurance Contract and Policies

A type of insurance policy where the insured chooses premium levels or pay using adjustable premiums are known as Universal Life policies. When bought through an agent (broker) and an insurance company, the company issuing the universal life contract guarantees a minimum interest rate that that is paid on the cash value.

These insurance policy contracts offer holders flexible premiums, the benefits of retirement planning cash values and death benefits.

Cash values in a UL policy may be borrowed against for insureds use.

Flexible Premium

Universal Life Insurance carries a flexible premium option. These policy provisions allow for the insured to make lump sum premium payments into the life contract or they can skip scheduled premiums without the contract lasping. The broker or agent informs the person that as long as cash values in the universal life contract are sufficient enough to cover the monthly expenses, the policy is still in effect. This flexible option allows customers to make insurance premiums as their cash situation allows.

No Lapse Guarantee (Minimum) Premium

The no lapse guarantee premium is determined by the company and is the lowest premium a policyowner may pay at issue. It is a cost-per-thousand of face amount that varies by age, sex, and smoker status. During the first five years, the policy is guaranteed not to lapse if at least the cumulative no lapse guarantee premium is paid and remains in the policy.

Death Benefit Guarantee

The Death Benefit Guarantee premium is a level premium required on a cumulative basis to have a guaranteed death benefit for 30 years or for life regardless of the amount of net surrender value. This premium may be less than the no lapse guarantee premium; if so, we will accept this lower premium level on the Universal Life Policy.

Planned Periodic

The planned periodic premium, also known as the stipulated premium, is the premium the policyowner plans to pay. It's a schedule for the company to follow for sending reminder premium notices or for Electronic Fund Transfers (EFTs) from the policyowner's bank account. The policyowner may change the planned periodic premium at any time. Both the dollar amount and frequency of notice may be changed. There is no charge to change the planned periodic premium.

Target Premium

The target premium on a universal life policy is the maximum premium on which full commissions are payable. First year commissions on Universal Life are 50 percent up to target premium, and 3 percent on premium exceeding target. The target premium normally equals the Death Benefit Guarantee to 95 Rider premium, excluding the cost of riders and/or ratings.

Death Benefit Option

Universal Policy holders can choose a level death benefit or an increasing benefit. The cash values in the policy allows for increasing amounts payable at death, if that option is chosen.

These can be very attractive policies for individuals looking for the best of life insurance protection, felxible premium schedules and the ability to earn more on the account through the cash value investments.

Policy Loans

The policyowner may borrow against the accumulated value of the policy.

Maximum Loan Amount

The maximum loan amount available is the accumulated value of the policy minus the surrender charge, any outstanding loans, loan interest and monthly deductions to the end of the year (EOY). The calculation assumes that all monthly deductions for the rest of the year are equal to the most recent monthly deduction and that no more premiums will be paid for the rest of the year.

Broker and Agent

Contact us if you are an individual investor or a business looking for a broker, agent or more information on Universal Life or any insurance and investment product. We are the educators to the industry and are licensed insurance professionals (Agent Broker in New York and most other states). We give free quality advice to our website visitors and we can provide your own insurance professional to answer your questions.

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