UNIVERSAL LIFE

These products allow for the greatest flexibility of premium payments - both skipping scheduled contributions and also increasing the contributions above the scheduled amount.  Also, with universal life you can customize a benefit period to fit your clients exact need.  Premium amounts are based on the minimum required for mortality and expenses with all additional funds earning the current rate of interest.  Universal Life can be used to design cases with benefits lasting for a specified amount of time, similar to term insurance, or you can target cash values for retirement benefits or any other income stream.  

Advantages - Lots of flexibility for case design of premiums benefits and policy values.

Disadvantages - Less guarantees in the contract with regard to benefits and premiums.

One method for doing a "thumb nail" comparison between a whole life contract and a universal life contract for potential performance is to run both proposals with the same premium and death benefit.  Run the universal at the guaranteed interest rate and compare this with the whole life guaranteed numbers to see which performs better in a worse case scenario.

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Securities offered through Mutual Service Corporation. Mutual Service Corporation and LPL Financial are affiliated companies and are members of FINRA/SIPC. FINRA web site is www.FINRA.org.  Investment Advisory Services offered through Financial & Investment Management Advisors, Inc., an SEC Registered Investment Advisory Firm. Financial & Investment Management Advisors, Inc. is not affiliated with Mutual Service Corporation or LPL Financial.

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Last modified: June 17, 2008