Unlike term and whole life insurances, this policy blends term insurance and an investment account into one contract. Also its premiums can be increased or decreased, paid when due or at unscheduled dates, or stopped entirely and restarted at the owner's will provided the policy value is adequate to maintain the cost of the insurance.
This type of policy is adapted well to satisfy the changing insurance and investment needs of its owner.
1. Flexible coverage
The prime attraction of the universal life policy lies with its flexibility that allows owner of universal life insurance policy to increase or decrease the policy's face amount and evidence of insurability is usually needed for the increases. Its flexible coverage also established a life insurance contract that (subject to an insurability requirement) allowed the policy owner to:
a. Increase or decrease the face amount of insurance
b. Add more lives insured
c. Substitute one life insured for another
(By Kyle J. Norton)
Recommended Program
Live Your Life Insurance
Teaches You Surprising and Viable Strategies
For Developing Prosperity Through
Your Life Insurance Policy
Life Insurance - Types of Death Benefit of Universal Life
By Kyle J Norton
As we mentioned in previous articles, UL plans are unbundled, the various components of the plan such as insurance charges and earned interest can each be isolated and quantified. Consequently, they are much easier to understand and explain than traditional bundle permanent life insurance products.In this article, we will discuss the types of death benefit of the universal life policy. The type of death benefit dictates exactly how much will be paid out upon the death of the insured in the future. The more common varieties of death benefit structures found in UL contracts are
1. Level
This death benefit remains level throughout the duration of the policy. This option is the least expensive since the risk decreases over time as the fund values increase.
2. Level plus cash value
This death benefit option pays out the balance of the cash value or accumulating fund along with the initial death benefit amount. This option provides a cost-effective means of providing clients with increasing life insurance coverage.
3. Level plus indexed
This death benefit increases annually by either a fixed percentage selected at time of issue or an external inflation index such as consumer price index.
The advantage of this death benefit is that the insured can have a fixed, increasing coverage amount, increasing either by the same percentage every year or by inflation
4 Level plus return of premium.
The return of premium death benefit option is similar to the indexed option. It has the same advantages and disadvantages. This type of death benefit has definite market appeal since the insured's heirs gets back whatever was paid into the plan with or without interest,plus the initial insurance coverage amount.
I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:
Kyle J. Norton
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://life-insurance10.blogspot.com
All rights reserved. Any reproducing of this article must have all the links intact.
I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990.
Article Source: http://EzineArticles.com/?expert=Kyle_J_Norton
Recommended Program
Live Your Life Insurance
Teaches You Surprising and Viable Strategies
For Developing Prosperity Through
Your Life Insurance Policy
Understand Investment Options of Universal Life Insurance
By Kyle J Norton
As we mentioned in previous articles, UL plans are unbundled, the various components of the plan such as insurance charges and earned interest can each be isolated and quantified. Consequently, they are much easier to understand and explain than traditional bundle permanent life insurance products. In this article, we will discuss the investment options of the universal life policy. In fact, in order to compete with the mutual fund industry, insurance companies offering UL are increasing the number of their investment options to reflect the various investment types found outside of insurance policies. Here are the two main types of investment options offered within most UL insurance policy.
1. Guaranteed Investment Accounts
These type of accounts are available from daily interest accounts to 10 or 20 year guaranteed interest accounts. They appeal to risk-averse clients who would like to see a steady guaranteed growth within their UL plans without being worried of the fluctuation of the stock market. They are much less risky than Indexed Accounts but they also offer less potential return.
The guarantee may be that the return within the UL will be no less than
a) 80% of the return of the 5-Year government bond
b) Equal the 5-Year government bond less two percent
c) 90% of the return of the 5-Year government bond less one percent
In fact, most UL contract may guarantee that the GIA return will never be lower than a certain amount, say 2%.
2. Indexed Accounts.
The performance of these funds is usually linked to the performance of an outside index or mutual fund. They offer the policyholder the opportunity to participate in more aggressive and riskier investment types. Performance can be linked to
a) The S&P 500 and other stock market index
b) European, Asian and Australian Index accounts or international index accounts that are tied to the performance of some types of world index.
c) Some indexed accounts use the return of some particular mutual funds as the outside index.
The ways in which the return for indexed accounts is linked to the outside index counterparts also vary:
a) The contract may state that the return will be equal to the return of the outside index, less a percentage per year. For example, the return for a S&P 500 index account may be equal to the return of the outside index, less a certain percentage.
b) The contract may specify that the return will never be less than the return of an outside index, less a management fee. For example, an American Index account that guarantees its gain will be no less than the return of the S&P 500 less 2%.
I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:
Kyle J. Norton
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://life-insurance12.blogspot.com
All rights reserved. Any reproducing of this article must have all the links intact.
I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990
Article Source: http://EzineArticles.com/?expert=Kyle_J_Norton
Recommended Program
Live Your Life Insurance
Teaches You Surprising and Viable Strategies
For Developing Prosperity Through
Your Life Insurance Policy
Equity Index Life Insurance Guide - How to Find Cheap Equity Index Universal Life Insurance Rates
By James J. Robinson
Equity index life insurance is a form of universal permanent life insurance wherein the cash value is determined by a certain index, like the S&P 500. While this type of policy can appear to be a tad more complex than other types of coverage; it is possible to understand how it works and then find cheap equity index universal life insurance rates if you decide that this policy is the type of coverage that will best meet your needs.
With an EIUL policy, if the index is higher at the end of the year the cash value of your policy will increase. If the index goes down, your cash value will not increase, but instead earn the minimum amount of interest guaranteed in your equity index policy.
Note that the amount credited to your equity index life insurance policy is determined by a number of factors such as participation rate, asset fees, and caps.
The participation rate is a percentage of the increase in the index that will determine how much money is credited to the cash value of your policy.
Asset fees are a stated percentage that is deducted from any positive increases in the index.
Caps represent the maximum annual increase that can be credited to the cash value of your policy.
There are several advantages to an equity index universal life insurance policy. One of the advantages is that you have a greater potential for higher interest rates then a more traditional universal life insurance policy. In addition, an EIUL policy offers you more protection from market decreases than a variable life insurance policy offers.
One of the main disadvantages to an EIUL policy is that this type of life insurance policy carries a higher risk factor than a traditional universal life insurance policy. Also, the cap rate may limit the maximum rate you can earn in a good market compared to the potential earnings of a variable rate life insurance policy. You also may be charged by the insurance company on a periodic basis.
Many EIUL polices come with such choices as a flexible premium payment plan, survivorship life, and a single-premium insurance policy.
To determine if an equity index life insurance policy may be a good choice for you and your family if a variable life insurance policy looks good, but seems too risky for your financial strategy, and if the guarantees of a universal life insurance policy make you feel more comfortable, but you feel the potential for accumulating cash value is too low.
Some of the main features of an equity index life insurance policy include, but are not limited to, tax deferred interest earnings, tax advantaged insurance protection, cash value protection against declining markets, annual lock-in of earnings, guaranteed minimum yearly returns, premium flexibility, and cash value access.
Before purchasing any type of insurance, including an equity index life insurance plan, do some research on any company you may be considering. In addition, compare equity index life insurance features, benefits, and premiums before choosing this or any type of insurance policy. Remember, the amount of interest you will be credited is in the hands of the insurance company you chose to use for an equity index life insurance policy, and the policy is only as solid as the insurance company you select.
You can learn about the financial strength of any insurance company you may be considering at A.M Best, Moody's, Standard & Poor's, and other independent rating companies.
To find cheap equity index universal life insurance quotes and cheap life insurance quotes on other types of policies from various life insurance companies then be sure and compare rates from at least 3 different companies. Visit http://www.CheapoLifeInsurance.com to compare rates easily and try to save yourself some money.
Get started finding cheap life insurance today!
Life Insurance - Understand the Cost and Mortality Components of Universal Life Insurance
By Kyle J Norton
UL plans are unbundled, the various components of the plan such as insurance charges and earned interest can each be isolated and quantified. Consequently, they are much easier to understand and explain than traditional bundle permanent life insurance products. Most UL policies are actually distinguished by differences in their separate components. In this article, we will discuss The cost and mortality Components of Universal Life insurance
1. Cost of insurance (COI )
a) Yearly renewable term ( YRT )
The cost of insurance increased every year with the actual increasing mortality risk of the policyholder. These type of universal life policy performs very well in the early years because the cost of insurance charges are low. However, they tend to suffer in later years when the COI charges become very large.
b) Level cost of insurance
A popular alternative to the YRT is the Level COI structure where the cost of insurance is scheduled to remain constant throughout the duration of the policy. The main benefit of this plan is that, although cash values are lower in the early policy years, the policy performs well if clients want safe for retirement. Since UL contracts are long-term protection vehicles, the later higher values are desirable.
c) Hybrid cost of insurance
They have high early policy values due to the lower initial COI, but they do not suffer from severe erosion of fund values later in the policy since ultimate risk costs are capped. Other contracts allow the client to essentially select the mortality component from their term insurance such as term 5, 10, 20, 100 . . . and then shape a UL contract around these COI rates, complete with tax-sheltered fund.
2. Mortality
a) Guaranteed mortality
A popular Universal life policy where the cost of mortality rate of insurance is guaranteed throughout the duration of the policy. The premium is higher than non guaranteed counter part. If they have purchased a UL plan with YRT COI, the amount deducted every year will be exactly as specified in the contract.
b) Non Guaranteed mortality
Since the insurance company is essentially passing the mortality risk on to the client, the initial mortality costs and quite possibly, the future costs can be substantially lower than those charged in a guaranteed contract. This type of plan's advantages is the significant upside potential in the way of reduced mortality costs, but the downside risk is limited by way of the guaranteed maximum costs.
I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:
Kyle J. Norton
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://life-insurance08.blogspot.com
All rights reserved. Any reproducing of this article must have all the links intact.
I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990.
No comments:
Post a Comment