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First Commitment - Product Universe

The product type and how it is funded determines the potential risk and performance of your insurance.

There are four main product universes to choose from:

Whole Life Universe
(current interest credited/participating whole life)

  • Premiums are generally guaranteed not to change at the illustrated rate.
  • Face amount of the contract is generally guaranteed not to go below a specific amount if the guaranteed premium is paid.
  • Substantial floor guarantees as to cash value and death benefit.
  • When policy experiences favorable interest earnings and mortality, the favorable experience is credited directly to the policy or through dividends.
  • Favorable interest and mortality significantly increases cash value and death benefit per dollar of premium.
  • While premiums are due and payable each year, whole life can give flexibility if out-of-pocket premiums need to be reduced or skipped since the cash value can be applied to pay premiums.

Universal Life Universe

  • Premiums, cash value, and death benefit are not guaranteed at the illustrated rate. Offers flexible premium.
  • Offers flexible premium.
  • Face amount of the policy can be guaranteed not to go below a specific amount if a specified premium is paid.
  • Offers potential to accumulate higher cash value per premium dollar than whole life.
  • Generally less substantial floor guarantees as to interest credited on cash value.
  • Does not have a scheduled guaranteed cash value. As a result, there may not be sufficient cash value to allow out-of-pocket premium reduction or skipping.

Variable Universal Life

  • Permanent death benefit coverage where the policy owner directs investment of policy cash values into various investment options called sub-accounts.
  • Maintains the core characteristics of universal life, but shifts the investment risk and control from the life insurance carrier to the policy owner.
  • Potentially allows for greater cash value accumulation but with a significantly higher level of risk than is found with other types of cash value life insurance.

Variable Universal Life is long term investment normally suitable for clients with investment experience, a higher level of risk tolerance, and the financial resources to withstand investment fluctuations, including the possible loss of principle.

Temporary Coverage Universe (Term)

  • Provides highest death benefit per premium dollar.
  • Premiums generally increase over time.
  • Becomes more expensive than a permanent contract.
  • Coverage not available at life expectancy.

Next Step: Once you have decided on the product, decide whether you want to make a high, mid-range, or low annual premium.