Variable universal life insurance (VUL) is a form of permanent life insurance that combines universal life flexibility with investment-based cash value growth. Unlike other universal life policies, VUL allows policyholders to invest cash value directly in market-based subaccounts, creating higher growth potential along with greater risk. What Variable Universal Life Insurance Is Variable universal life … Read more
Indexed universal life insurance (IUL) is a type of universal life insurance that credits cash value growth based on the performance of a market index, such as the S&P 500, while still providing permanent life insurance coverage. IUL policies are designed to offer growth potential greater than traditional universal life insurance, with some protection against … Read more
Universal life insurance offers several tax advantages, but those benefits depend on how the policy is funded, managed, and accessed over time. Understanding the tax treatment of premiums, cash value growth, loans, withdrawals, and death benefits helps policyholders avoid unintended tax consequences. Tax Treatment of Premiums Premiums paid into a universal life insurance policy are … Read more
Universal life insurance allows policyholders to access cash value through policy loans and withdrawals. While both provide liquidity, they function differently and have distinct effects on cash value, death benefits, and long-term policy sustainability. Understanding these differences is essential before accessing policy funds. What a Policy Loan Is A policy loan allows the policyholder to … Read more
Universal life insurance policies can lapse if they are not properly funded or monitored over time. A lapse terminates coverage and eliminates both the death benefit and remaining cash value. Understanding how and why lapses occur helps policyholders take steps to keep coverage in force. What a Policy Lapse Means A policy lapse occurs when … Read more
Cost of insurance charges are a central component of universal life insurance and play a major role in determining how long a policy remains in force. Unlike whole life insurance, where insurance costs are built into a fixed premium, universal life insurance deducts insurance costs directly from the policy’s cash value or premium payments. Understanding … Read more
Universal life insurance policies allow policyholders to adjust the death benefit over time, providing flexibility that is not available in fixed-benefit life insurance policies. While this feature can be useful, changes to the death benefit affect policy costs, cash value performance, and long-term sustainability. What an Adjustable Death Benefit Means An adjustable death benefit allows … Read more
Universal life insurance policies use minimum premiums and target premiums to guide how policies are funded over time. Understanding the difference between these two concepts is essential for maintaining coverage and avoiding unintended policy lapse. What a Minimum Premium Is The minimum premium is the lowest amount required to keep the policy in force for … Read more
Interest crediting is a key factor that determines how cash value grows in universal life insurance. Unlike whole life insurance, where growth is largely guaranteed, universal life insurance credits interest based on policy-specific formulas, rates, or market-linked mechanisms. Understanding how interest is credited is essential for evaluating long-term policy performance. What Interest Crediting Means Interest … Read more
Cash value is a central component of universal life insurance and plays a critical role in determining whether the policy remains in force over time. Unlike whole life insurance, where cash value growth is largely guaranteed, universal life insurance cash value is more variable and depends on policy performance and funding decisions. What Cash Value … Read more