universal life insurance

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Universal Life Insurance

A life insurance policy that combines features of term life and whole life insurance. That is, a person pays a premium and, in exchange, receives at least a guaranteed death benefit (as with term life insurance). Additionally, one has a cash value account that may be invested and may offer a higher return for the policyholder. A person may use the funds in the cash value account to pay premiums, increase the death benefit, or even serve as collateral for a loan. Premiums are higher for universal life policies than for other forms of life insurance.

universal life insurance

A combination of term life insurance and a tax-deferred savings plan paying a variable return. This combination was developed during the early 1980s when interest rates rose to very high levels and caused the public to view regular whole life policies unfavorably.

Universal life insurance.

Universal life insurance is a type of permanent insurance that offers flexible premiums and a flexible death benefit.

Your tax-deferred cash value account accumulates at least the guaranteed rate of interest, but may accumulate at a higher rate if market rates are higher than the guaranteed rate.

You can use the money in your cash value account to pay premiums if there's enough available. And you can also increase the amount of the death benefit without having to qualify for the additional protection. This alternative allows you to build inflation protection into your insurance.

As with other permanent policies, you may be able to borrow against your cash value account, though any outstanding loan reduces your death benefit. You also get a portion of the cash value back, minus fees and expenses, if you end the policy.

However, universal life is a more complex product than straight life and the premiums are higher for a comparable death benefit.

References in periodicals archive ?
This indexed universal life insurance policy (this "Policy") is not sponsored, endorsed, sold or promoted by SPDJI, S&P, any of their respective affiliates (collectively, "S&P Dow Jones Indices").
To offset this risk of loss, the annuity arbitrage strategy also involves the purchase of a guaranteed universal life insurance policy, designed to require level annual premiums until the death of the insured.
American General Life has introduced an individual joint and last survivor guaranteed universal life insurance policy, AG Secure Survivor GUL II featuring more flexibility to adapt the policy to rising needs in the future.
An asset-based long-term care policy is basically is a modified universal life insurance policy, which is a tax-advantaged investment in which the cash value of your monthly premiums is credited with interest and you can take out loans based on your input without tax penalties (it's often considered an alternative to Roth IRAs for folks who have income restraints that prohibit them).
When you have someone who just doesn't want to buy a [standalone LTCI policy], you can take some annuity money and put it in something like a universal life insurance policy that offers some level of long-term care coverage, where you can get up to five times the face value for long-term care.
have introduced what they say is the first stand-alone, dual-coverage universal life insurance policy that pays a benefit on the first death.
Since cash flow is an issue, Springs should purchase $500,000 in term life insurance to replace the $150,000 fixed universal life insurance policy.
Lifetime Protector offers a universal life insurance policy with flexible, lifetime-guarantee premiums, a nine-year surrender charge period, rolling target premiums and many optional riders to increase coverage.
Universal Life Insurance--An adjustable universal life insurance policy provides both a death benefit and an investment component called a cash value, which earns interest at rates dictated by the insurer.
The surrender value and the accumulation value of a universal life insurance policy converge when the surrender charge equals zero.
Protective Custom Choice UL (Form Number UL-22) and Protective Advantage Choice UL (Form Number UL-21) are universal life insurance policies; and, Protective Survivor UL, policy form UL-19 12-12, is a flexible premium second-to-die universal life insurance policy.
The purchase of a variable universal life insurance policy is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

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