UNIVERSAL LIFE SIMPLIFIED

Traditionally, life insurance policies were bundled with all of the cash and insurance elements of the plan inextricably tied to each other with the exception of participating policies that pay dividends to policyholders. Universal life was created to provide an increasingly flexible alternative for people who wanted to combine life insurance coverage with savings and have the option of changing the elements within the plan throughout its existence.

MOST UNIVERSAL LIFE PLANS OFFER THE FOLLOWING OPTIONS TO THE POLICYOWNER:

a) Change Death Benefit

b) Change Life Insured

c) Add Additional Lives Insured

d) Pay Cost of Insurance Based Upon Yearly Term or Level Term Rates

e) Select a Guaranteed or Variable Cost of Insurance

f) Choose From Accumulated Funds + Other Accounts

g) Decide Between Guaranteed or Variable Investment Return on Accumulation Funds and Other Accounts

h) Make Any Amount of Contributions, as Long as There is a Minimum Cash Value

IMPORTANT REMINDERS ABOUT UNIVERSAL LIFE:

• Every action that a policy owner or investment or legislative body does to change parameters of policy will have a reaction within policy values
  
• For every action that changes the policy, generally, a counter action can be taken by the policy owner
  
• Due to all the factors that can alter the outcome of Universal Life it is necessary to review the plan every 3 years to make sure it is on track to reach its goals
  
• The policy owner should pay special attention to the annual report as it shows all aspects of the policy, and the costs unbundled are reported with details as to their nature and amounts
  
  

This material is for information purposes only and should not be construed as legal or tax advice. Every effort has been made to ensure its accuracy, but errors and omissions are possible. Individual circumstances may vary and specific legal and tax advice is recommended. Future tax changes and market conditions may affect this information.

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