Product suitability is determined by a personal financial profile that includes a risk tolerance assessment, financial goals and a life expectancy projection. Current assumption universal life insurance has three crediting methods to consider based on your personal financial profile: interest rate earnings, indice returns and separate sub account performance (positive or negative). Variable universal life is characterized as an investment product and the others universal life types are saving products.
The income design is critical to have any probability of success. The design must feature the lowest cost of insurance death benefit option that complies with TAMRA. Any death benefit option switching and/or decreasing in death benefit before distributions should be applied. The goal in death benefit management is to contain policy costs throughout the life of the policy which needs to be kept in force for the life of the insured.
Universal Life Insurance, is first and foremost a life insurance policy. If you require life insurance to provide cash at death to protect your loved ones, your business or your estate then an opportunity is created for you to utilize the reserve or cash value and use universal life as an "investment".
In Canada, there are limits to the amounts you can fund a universal life policy to keep the "tax advantaged" status of being exempt from accrual taxation. For individuals and corporations in the top tax brackets this tax advantaged status alone might make Universal Life a "good investment", but for most there needs to be an life insurance requirement.
In Canada, all earnings inside a Universal Life policy are expressed as interest, however, they can mirror the earnings of many of the top mutual funds. One company offers 400+ investment options in a "tax advantaged" plan.
An independent life insurance broker, representing several companies, can help you find the right policy at the right price.
If you have any further questions, or feel that I could be of assistance, please do not hesitate to contact me.
President, Lane Independent Agency, Southern California
For many people it may be the best choice. It is a type of permanent life insurance. Unlike Whole Life, whose growth depends entirely on the carrier's general fund growth, Universal is more reflective of the market. This means it can go up substantially or down substantially. One way of avoiding the terrible lows is to buy indexed universal, which limits both the ups and the downs. Discuss your options with an agent. Thank you. GARY LANE.
That is a great question! Let's start out by making sure we are using the same terminology though - an investment is something that is designed to increase your money, in a way that allows you to access it. Investments are stocks, mutual funds, bonds, things like that. Insurances are not investments per se - they are protections - like your emergency fund that you should have, they are designed to protect against a loss that you may incur. In the case of life insurance, that loss is you. As such, you cannot reap the benefits of the policy, it goes to those you leave behind. Universal life policies are often pitched like investments because they CAN have significant cash growth. They are just like the stock market though - they can go belly up without proper management and attention to the payments needed. These are not your "buy it and toss it in the safe" policies, and generally work out very poorly for those who do that. Any life insurance policy is an investment in your peace of mind. If you are someone who has a higher risk tolerance, and closely watches the financial statuses very closely, then you might want to speak to your advisor about a UL policy, but please make sure they explain it very thoroughly to you, including all of the things that have to fall perfectly into place to provide those big dollars that they promise you, okay? If you want the straight deal, contact me, I'm happy to help. Thanks for asking!
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The income design is critical to have any probability of success. The design must feature the lowest cost of insurance death benefit option that complies with TAMRA. Any death benefit option switching and/or decreasing in death benefit before distributions should be applied. The goal in death benefit management is to contain policy costs throughout the life of the policy which needs to be kept in force for the life of the insured.
In Canada, there are limits to the amounts you can fund a universal life policy to keep the "tax advantaged" status of being exempt from accrual taxation. For individuals and corporations in the top tax brackets this tax advantaged status alone might make Universal Life a "good investment", but for most there needs to be an life insurance requirement.
In Canada, all earnings inside a Universal Life policy are expressed as interest, however, they can mirror the earnings of many of the top mutual funds. One company offers 400+ investment options in a "tax advantaged" plan.
An independent life insurance broker, representing several companies, can help you find the right policy at the right price.
If you have any further questions, or feel that I could be of assistance, please do not hesitate to contact me.