Universal Life (UL) insurance is permanent life insurance with a flexible premium structure and the ability to build cash value.
- You can set your premium amount and payment schedule provided they are sufficient to support the death benefit and sustain the policy.
- Your payments above the cost of insurance are credited to the policy’s cash value, which in turn earns monthly interest.
- The policy cash value is yours. You may allow it to accumulate, withdraw or borrow against it, or use it to pay policy premiums.
Liquidity is needed at death to pay debts, estate taxes and other estate expenses or to equalize inheritances. Universal Life insurance is uniquely suited because it pays a death benefit when it is needed most – upon the death of the insured or insureds.
Variable Universal Life
Variable Universal Life (VUL) insurance is permanent life insurance that provides death benefit protection with the ability to build cash value through allocation among a family of professionally managed Sub-Accounts. You decide how to invest your net premium among the investment options offered for the policy, or you can choose a professionally-developed asset allocation option based on your investment goals, risk tolerance and time horizon.
Term life insurance is basic life insurance coverage that provides protection for a specific period of time (“term”). It is a suitable life insurance product if you need short-term death benefit protection and have temporary financial obligations, such as mortgage payments, car payments, or short-term debts. Coverage provides lower premiums for people who cannot afford permanent life insurance premiums. Term life policies are available for 5/10/15/20/30 year terms at most ages, and the premiums can be guaranteed for the duration of the coverage. Should you decide you want permanent life insurance, you can often convert your term life policy to a permanent life policy at a later date, without medical underwriting, (within certain parameters).
Whole Life Insurance provides permanent death benefit protection throughout your life – from the moment you purchase your policy until the day you die – provided you pay the minimum scheduled premium. While Whole Life policies often have fully guaranteed premiums, cash value and death benefits, they may also offer various riders to allow for customization to your specific objectives. The guaranteed elements of Whole Life insurance can provide safe, predictible, life insurance protection.
Equity Indexed Life
Equity indexed universal life insurance is a fixed product in which the interest credit you earn is tied to the performance of a market index that you select. Upside caps still allow you to reap the benefits in a solid-performing market, and downside minimum crediting rates of 0-3% provide assurance that you won’t lose money over the term of the policy.
An Annuity is a contract between you and an insurance company offering numerous potential benefits and favorable tax treatment. Annuities can be an excellent solution designed to deliver a tax-advantaged, guaranteed source of lifetime income. Products vary widely and can be complex, often requiring a long-term commitment – making it important to consult an advisor who can explain charges, fees and benefits available to you.
Survivorship Life Insurance
A Survivorship Life or Second-To-Die Life policy, provides coverage for two insureds, and pays the death benefit upon the death of the 2nd insured. Survivorship policies can provide the fundamental liquidity necessary to allow for a successful estate plan. Innovative policy designs can often provide an internal rate of return (IRR) of premiums paid to death benefits, at average life expectancy, far in excess of investment returns within the clients portfolio. For this reason, Survivorship policies can be one of the most attractive, cost-effective, items in your Wealth Transfer arsenal.
Split-Funded Defined Benefit Plans
A defined benefit plan is a type of Qualified Retirement Plan in which a portion (at least 50%) of the annual contribution to the plan is allocated towards traditional investments, while the remaining portion (<50%) is allocated towards the purchase of a life insurance policy. The cash value portion of the life insurance, together with the other investments in the plan, provides the funding for the future retirement income distributions. Contributions to Split-Funded Defined Benefit retirement plans are tax-deductible to the employer, and investment returns accumulate on a tax-deferred basis. These plans can generate very large tax deductions and offer safe, predictible growth of assets for future retirement needs.
A Buy/Sell plan, is a legally binding agreement whereby business owners enter into an agreement to purchase the business interest of a deceased owner, often at a pre-determined price. In order to provide for the delivery of funds for the purchase of a decedents shares, the business will often purchase life insurance policies. Alternatively, the business owners may purchase the policies themselves, with each business owner acting as policy owner and beneficiary, on the lives of each of the other owners. Life insurance may also be utilized as part of a business succession plan, to help deliver the cash needed to allow successful business owners to transition their company at some time in the future.
Executive Bonus Plans
A simple, tax-deductible plan in which your business pays a bonus or additional salary to a select executive, who then purchases a life insurance policy on his/her life. The executive-owned life insurance policy may provide supplemental retirement income and his/her beneficiaries may receive the policy death benefit income tax-free.
Disability Income Plans
A disability income policy can provide a reliable source of income for a business owner or employee, in the event of a disability. Monthly disability income benefits are payable after a waiting period, and can generally be provided to the employee’s age 65 or lifetime, depending upon the occupation of the insured.