Universal Life

Universal Life Insurance

Universal life insurance (often shortened to UL) is a type of permanent whole of life insurance, where the excess of premium payments above the current cost of insurance is credited to the cash value of the policy.

Essentially the more you pay for a given amount of life cover, the greater will be the accumulated cash value.

This product initially gained popularity in the US in the 1970's in response to consumer objections over the fact that a traditional life insuarance policy did not reveal the allocation of premium between the costs of life cover and savings!

Features of a typical UL policy are as follow:

• Flexibile Premiums
• Flexibile benefits
• An “unbundled” pricing structure; and
• A facility to accumulate a cash value. 

Flexible Premiums:

Subject to certain limits, the policyowner may pay more or less than the premium stated in a given year, after the first year. At his option, he can even omit premium payment for a particular year (again subject to certain conditions). Of course, the amounts of coverage and cash value depend on how much premium is paid. 

Flexible Benefits:

Subject to certain limits, the death benefit purchased may be increased or decreased, although proof of insurability may be required for an increase in benefit. The Death Benfit will be the face amount plus the cash value, or the face amount only.

“Unbundled” Also known as 'split dollar' pricing:

With UL policies he insurer separates and individually discloses, both in the policy and in an annual report

1. the pure cost of protection (covering the death risk adn any health or occupation loadings); 
2. interest; and 
3. expenses.

Cash value:

After the first premium payment, additional premiums (subject to an individual limit) can be paid at any time.

These, with interest earnings, are added to the cash value after the deduction of expense.

Call the helpful crew at Navigator 2530 2530 or drop us a line at crew@navigator-insurance.com for any help you'd like with landlord or any other form of insurance.