What is a universal life policy and how does it work?

A Universal Life policy is a type of permanent life insurance with the benefit of a flexible premium and possible cash value. When premium is paid, a portion of it pays for the cost of insurance. The remainder of the premium is added to the cash value and may earn current interest.

Flexibility: you decide the amount of premium payments, subject to the minimum required premium to cover monthly cost of insurance.

Premium: after cost of insurance, and expenses are deducted, the balance will be added to your account value and will be credited current interest rates (but not less than guaranteed rates).

Death Benefit: this will be paid to your beneficiaries, generally income tax-free.

• Option A – Level death benefit (amount of life insurance)
• Option B – Death benefit plus your policy account value