Universal Life Insurance

Definition of "Universal life insurance"

Candace Dufrene real estate agent

Written by

Candace Dufreneelite badge icon

Dufrene Realty Group

Adjustable life insurance under which (1) premiums are flexible, not fixed; (2) protection is adjustable, not fixed; and (3) insurance company expenses and other charges are specifically disclosed to a purchaser. This policy is referred to as unbundled life insurance because its three basic elements (investment earnings, pure cost of protection, and company expenses) are separately identified both in the policy and in an annual report to the policy owner. After the first premium, additional premiums can be paid at any time. (There usually are limits on the dollar amount of each additional payment.) A specified percentage expense charge is deducted from each premium before the balance is credited to the cash value, along with interest. The pure cost of protection is subtracted from the cash value monthly. As selected by the insured, the death benefit can be a specified amount plus the cash value or the specified amount that includes the cash value. After payment of the minimal initial premium required, there are no contractually scheduled premium payments (provided the cash value account balance is sufficient to pay the pure cost of protection each month and any other expenses and charges. Expenses and charges may take the form of a flat dollar amount for the first policy year, a sales charge for each premium received, and a monthly expense charge for each policy year). An annual report is provided the policy owner that shows the status of the policy (death benefit option selected, specified amount of insurance in force, cash value, surrender value, and the transactions made each month under the policy during the year premiums received, expenses charged, guaranteed and excess interest credited to the cash value account, pure cost of insurance deducted, and cash value balance).

 

Need help as a:

I'm interested to:

Buy
Sell
Rent

I work in:

Residential
Commercial
Rental
Reach out to the local professionals for help
 
I agree to receive FREE real estate advice.

Agents, get listed in your area. Sign up Now!

Here's what you'll get:

1. Full zipcodes coverage for the city of your choice for 3 months

2. The ability to reach a wider audience

3. No annual contract and no hidden fees

4. Live customer support/No robo calls

$75 - Any City - 3 Months Coverage
 
loader gif

Please wait ...

I agree to receive FREE real estate advice
I agree with Terms & Conditions and Section 5-5.9.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Company that has a capital fund established by contributions from its stockholders in addition to its surplus accounts and reserve accounts. ...

Premium required by an insurance company for plans subject to premium adjustment. The initial provisional premium is paid to put a commercial property or liability insurance policy into ...

Part of the business risk exclusion in general liability insurance that denies coverage for subsequent claims if a defective product is not recalled by an insured. For example, if a ...

Form of inland marine insurance under which an insured is indemnified for damage or destruction of his or her on-premises property if it is due to radioactive material stored or used within ...

Term used in the reinsuring of disability income insurance policies in that, after an extended period of time expires (in addition to the elimination period found in the disability income ...

Insurance company that puts together a consortium of insurance and reinsurance companies to provide an adequate financial base with sufficient underwriting capacity to insure large risks. ...

Offer made by the insurance company to insure an applicant, provided the applicant is insurable according to the underwriting standards of the company, and the applicant accepts the offer ...

Cost per unit of insurance. ...

Life insurance under which an insured receives the face value of a policy if the individual survives the endowment period. If the insured does not survive, a beneficiary receives the face ...

Popular Insurance Questions