Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
This is what's known as Universal Life insurance. These are permanent coverage programs that build cash value, much like Whole Life insurance does. The advantage of these programs is that you can pay more or pay less each month to keep the coverage going. However, when you do this, you can affect the guarantees (and even the non-guaranteed aspects) under the programs.
There are two important factors to keep in mind when structuring a universal life policy, the guaranteed and non-guaranteed side. In short, the guaranteed side tells you how long your coverage is guaranteed for while the non-guaranteed side tells you how long it can continue on for, based on current assumptions (these figures can change and, therefore, the non-guaranteed length of coverage can change).
There's also what's called a Guaranteed Universal Life insurance policy (GUL). These programs can create a level premium and death benefit guaranteed to a specific age (all the way up to age 121 with most carriers to guarantee the death benefit for life). What this does is allows you to keep the premiums to its lowest levels and maximize the death benefit rather than placing the focus on the build-up of cash value, which is a common reason why many people buy whole life insurance.
There are other moving parts in a universal life insurance policy, but this provides a brief overview.
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There are two important factors to keep in mind when structuring a universal life policy, the guaranteed and non-guaranteed side. In short, the guaranteed side tells you how long your coverage is guaranteed for while the non-guaranteed side tells you how long it can continue on for, based on current assumptions (these figures can change and, therefore, the non-guaranteed length of coverage can change).
There's also what's called a Guaranteed Universal Life insurance policy (GUL). These programs can create a level premium and death benefit guaranteed to a specific age (all the way up to age 121 with most carriers to guarantee the death benefit for life). What this does is allows you to keep the premiums to its lowest levels and maximize the death benefit rather than placing the focus on the build-up of cash value, which is a common reason why many people buy whole life insurance.
There are other moving parts in a universal life insurance policy, but this provides a brief overview.