Ch. 3-Adjustible Life/Universal Life Policy (Flexible Prem) Section

Adjustable Life

-can be term or permanent insurance -policyowner can adjust: prem or prem-payment method, face amnt, covg period -good for insured's with unpredictable income -not sold very much

Universal Life Option B

-every year, increase death benefit by the amount of the cash value -beneficiary receives the death bene and cash value is apart of the death bene (NOT an xtra fund) -ex) $100,000 policy, cash value $50,000; beneficiary gets @100,000

Expenses

administrative costs charge for the life insurance @ 1 year term rates (lowest rates necessary) -long term conseq: inc prem by each year (which takes more from bucket)

Universal Life Option A

appears as a whole life policy; dep on the interest rate changes -dont know when the policy will mature (may not at age 100)

Universal Life-flexible payments

dont have to pay a set amount evry month (even pay no $) -skipping requires cash value exceeding the prem

Loans (both universal life/whole life)

if take a loan out and subsequently die, beneficiary gets the death bene MINUS the loan

Loans/Withdrawls

money taking out while alive -the less $ in the bucket the more withdrawal/take out loans

Universal Life

prem and interest pour into cash value (thats your bucket) and expenses/loans/withdrawls are taken from cash value