Universal Life Insurance

Universal life insurance is a more permanent type of insurance offering for people looking for long term insurance coverage. Universal Life, also called UL, offers a great deal of flexibility over term insurance.

You can pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You can also pay premiums in advance and even skip payments in certain circumstances. Plus, UL can better meet your changing needs over time because you can increase or reduce the death benefit.

Many of today’s universal life policies also offer guaranteed lifetime protection to help you protect your loved ones against financial hardship if you die. As long as your premiums are paid, your policy will remain in force no matter how long you live. Some life insurance policies without this feature only pay a death benefit until a certain age, like age 100.

Universal life insurance also has a “savings” feature, called cash value. Each payment you make to the contract pays for your insurance coverage and then the excess is invested to build cash value that you can use in the future. The insurance company invests this cash value and credits interest to this account. Most UL contracts also offer a guaranteed minimum interest rate so you always know that your money will earn a minimum amount. The cash value in your account also grows income tax-deferred allowing it to accumulate faster.

If you need to access your cash value, you have a couple of options. You can “borrow” your own cash value by taking a policy loans. These loans are generally not taxed as long as your policy stays in force. You can even withdraw money from this cash value without taxes as long as the total amount of money you withdraw is not greater than the total premiums you have paid. Be aware that any loans and withdrawals may generate an income tax liability, reduce available cash value, reduce the death benefit or cause the policy to lapse.

Universal Life Offers:
Flexible premium payments
Guaranteed death benefit protection on some policies
Potential “savings” feature from which loans and/or withdrawals can be taken Tax-advantaged cash value accumulation potential Income tax-free death benefit

Variable Universal Life

Variable universal life insurance (VUL) is another type of permanent life insurance coverage with the potential to build cash value.

If you’re like many people, your life insurance coverage needs may vary over time. VUL also allows you, within policy guidelines, to determine the amount and frequency of your premium payments and to adjust the death benefit of your policy up or down, as long as you pay the minimum required premium to keep the policy active.

Beyond the death benefit, a VUL policy has a cash value feature that may accumulate from premiums you pay in excess of the policy charges (like cost of insurance or expense charges). This cash value may earn interest or grow in value, and these earnings are allowed to grow tax-deferred. The cash value may also decrease in value, depending on the performance of the variable investment options (subaccounts) you choose.

When you purchase a VUL policy, you and your financial professional choose which subaccounts are suitable for you and how you want your cash value invested.

Most VUL policies offer a wide range of investment options, from conservative to aggressive, and even include a fixed account. Your financial professional will work with you to select a combination of investment options that suit your risk tolerance and financial goals.


Variable Universal Life offers:

Flexible premium payments
Access to sub accounts offering the potential for greater cash accumulation but also the potential for greater market risk.
Versatility in death benefit protection options
Tax-deferred cash value accumulation potential

Before investing, carefully consider the investment objectives, risks, and charges and expenses of the variable universal life insurance policy and each underlying variable investment option. This and other information is contained in the prospectuses for the variable universal life insurance policy and the underlying variable investment options. Obtain these prospectuses from your agent/registered representative and read them carefully before investing.