Life Insurance

Life Insurance

Life insurance, also called Term life or 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 insurance policy did not reveal the allocation of premium between the costs of life cover and savings!

Features of a typical Universal Life policy are as follow:

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 Benefit 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

  • 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.