Endowment Life Insurance


Life Insurance Universal Life Insurance Universal life insurance or universal life also called flexible premium life insurance or adjustable life insurance, introduced to the market in the early 1980s. Definition of universal life insurance It is a type of permanent life insurance with cash value, this cash value together with the death benefit is adjustable at the buyer’s discretion. Life insurance with investment, the policyholder is given the right to increase or decrease the investment amount Life insurance with flexible premium, the policyholder can change the death benefit amount or the timing of premium payments. Universal life insurance is a form of life insurance that combines term life insurance protection with saving and investment scheme, the buyer reserves the right to vary the premium payments and death benefits. The return of interest fluctuates according to the investment performance of the life insurance company, but the buyer is guaranteed to have minimum return if the investment performance is poor, thus reduces the risk of the buyer. Universal life insurance is the combination of term life insurance and saving and investment. The life insurance company normally provides information to the buyers, for example, how much premium payments go for company’s overhead and other expenses, and how much go for investment. Advantages of universal life insurance · The death benefit of a universal life insurance that pays to the beneficiary is not subject to income tax. · After the initial premium, the buyer has the choice in paying the premiums. He can increase or decrease the premium or investment, so that he can adjust whether he wants more protection or interest. · The buyer can borrow the accumulated cash value of the policy if he needs. Disadvantages of universal life insurance If the policy carries not enough cash value it may lapse, and the buyer is left without life insurance protection. If the life insurance company does not manage the investment appropriately, the return on the cash value potion dwindles, even if minimum interest rate is guaranteed. The cash value growth is limited. How it works? For universal life insurance, the life insurance company will have a portion of the premiums invested in bonds, mortgages and money market funds. If the investments are making profit the return will be credited to the buyer’s policy. But if the investments are on the reverse side, no profit earned or the company is making a loss, the policyholder will have to bear a potion of the loss. No matter how bad were the investments, a guaranteed minimum interest rate will be returned. Next

Universal Life Insurance

Universal life insurance or universal life also called flexible premium life insurance or adjustable life insurance, introduced to the market in the early 1980s.

Definition of universal life insurance

It is a type of permanent life insurance with cash value, this cash value together with the death benefit is adjustable at the buyer’s discretion.
Life insurance with investment, the policyholder is given the right to increase or decrease the investment amount
Life insurance with flexible premium, the policyholder can change the death benefit amount or the timing of premium payments.
Universal life insurance is a form of life insurance that combines term life insurance protection with saving and investment scheme, the buyer reserves the right to vary the premium payments and death benefits. The return of interest fluctuates according to the investment performance of the life insurance company, but the buyer is guaranteed to have minimum return if the investment performance is poor, thus reduces the risk of the buyer.
Universal life insurance is the combination of term life insurance and saving and investment.

The life insurance company normally provides information to the buyers, for example, how much premium payments go for company’s overhead and other expenses, and how much go for investment.

Advantages of universal life insurance

· The death benefit of a universal life insurance that pays to the beneficiary is not subject to income tax.

· After the initial premium, the buyer has the choice in paying the premiums. He can increase or decrease the premium or investment, so that he can adjust whether he wants more protection or interest.

· The buyer can borrow the accumulated cash value of the policy if he needs.

Disadvantages of universal life insurance

If the policy carries not enough cash value it may lapse, and the buyer is left without life insurance protection.
If the life insurance company does not manage the investment appropriately, the return on the cash value potion dwindles, even if minimum interest rate is guaranteed.
The cash value growth is limited.

How it works?

For universal life insurance, the life insurance company will have a portion of the premiums invested in bonds, mortgages and money market funds. If the investments are making profit the return will be credited to the buyer’s policy. But if the investments are on the reverse side, no profit earned or the company is making a loss, the policyholder will have to bear a potion of the loss. No matter how bad were the investments, a guaranteed minimum interest rate will be returned.