* Any guarantees of a Universal Life policy are based on the claims-paying ability of the issuer Show
** Maintaining the guarantee involves making sure the Custom Guarantee Value is more than zero and there are no unpaid loans. Making changes to the policy can cause the Guarantee expiration date to change. 1The policy will terminate if at any time the cash surrender value is insufficient to pay the monthly deductions. This can happen because of insufficient premium payments, because of loans or withdrawals, or because current interest rates or charges fluctuate. 2 In New York, it is called the Premium Back Option Rider. The opportunity to surrender the policy in exchange for some or possibly all premiums is available during two 60-day windows beginning in policy year 20 or 25. The surrender is subject to a 40% premium cap, and there is a minimum premium requirement (the monthly premium must be that needed to keep the policy in force until age 100). In most jurisdictions, the New York Life Universal Life form number is ICC19-319-51P, the New York Life Protection Up to Age 90 form number is ICC19-319-51P, and the New York Life Custom Universal Life Guarantee form number is ICC18-318-54P. State variations may apply. The Money Back Option Rider form number is ICC18-318-292R. State variations may apply. The Chronic Care Rider form number is ICC18-318-291R. State variations may apply. 1798029
Universal life insurance (UL) is one of the two main types of permanent life insurance (the other is whole life insurance). Like whole life, a universal policy can provide lifetime protection while building cash value with tax advantages.1 UL also gives you the flexibility to raise or lower premiums within certain limits, so it can cost less than whole
coverage.2 But it also offers fewer guarantees than whole life because if you make minimal premium payments for too long, it can impact cash value growth and the size of your death benefit.3
Lifetime protection From the first day the policy is in effect, UL can provide an income tax-free death benefit to help protect your family’s financial wellbeing.4 And as long as you keep a positive cash value amount, your coverage can’t be canceled. Cash value Like all permanent life insurance, it has a built-in cash value that grows over time and earns interest.5 You can take out policy loans against the cash value, use it to pay your premiums, or even use your coverage for cash to supplement your income in retirement.6 Flexible premiums UL lets you raise or lower your payments within certain limits as your circumstances change. While you may eventually have to pay higher premiums to keep your coverage, that flexibility can make it easier to keep your insurance policy in force if your earnings vary. Tax advantages The policy’s cash value grows on a tax-deferred basis, so no taxes are owed on current earnings or interest. Also, the death benefit is paid income-tax-free to beneficiaries. The flexibility and freedom of universal life also mean that there are fewer guaranteesIn a whole life policy, the premiums, cash value growth, and death benefit are guaranteed not to change. With UL, all those things are designed to be flexible. However, the amount of premiums you pay affects cash value growth. And as you use funds from the cash value, it will affect the amount your family receives when you’re gone. It could even cause the policy to lapse, so you should stay in contact with your financial professional to help make sure your policy continues to meet your needs. Checklist: Is universal life insurance right for me?
There are two parts to every premium payment
Note that minimum premium payments reduce the accumulation of cash value. As COI rises over time, it can result in cash value erosion, to the point that the insurer may require higher premiums in later years to prevent coverage lapse. That’s why many people choose to build the cash value by paying maximum premiums for the first several years – then using those funds if needed to help lower premium costs later on. How universal life insurance compares to other options
Want the opportunity for more cash growth? Consider variable universal life.Variable UL gives you the same kind of lifetime protection and payment flexibility as standard universal life with more investment options: you can invest part or all of your cash value in “subaccounts” that are similar to mutual funds. However, you have to choose and manage investments as you would in a brokerage account. And as with a brokerage account, you also assume more risk, including the possibility of losing part or all of your principal. How to get universal life insuranceUniversal life coverage can be a powerful financial tool that can help protect your family’s financial wellbeing for decades to come. It can give you the flexibility to help build assets, deal with life’s uncertainties, and even pass on wealth to the next generation. Each policy is tailored to the policyholder’s personal needs and financial strategy, and while premiums are flexible, a healthy 40-year old male should expect to invest about $8,000 a year for a $1,000,000 UL policy. But guidance is needed to arrive at the right solution for your needs. If you think this type of insurance is right for you, discuss your situation with an insurance professional or financial professional with life insurance experience. If you don’t know such a professional, ask a friend or colleague for a recommendation. Or, Guardian can connect you to a financial representative who can help. Frequently asked questions about universal life insuranceWhat are the benefits of universal life insurance?Universal life is a flexible way to get a permanent life insurance policy and build cash value. The premiums are flexible: you can raise or lower payments within certain limits set by the insurance company. It can be a solution to cover people with variable incomes because the cash value also allows them to make withdrawals and policy loans. What are the disadvantages of universal life insurance?With more options than term or even whole life coverage, a UL policy can be complex. The policy needs to be managed: you need to determine how much you want to pay for premiums, and with variable UL, you also have to make investment choices. Those variables, along with a cost of insurance that increases over time, can affect and even detract from the value of your cash value. So you also have to keep an eye on your value balance over time: If it goes down to zero, your premiums could go up, or the policy may lapse. What is the difference between whole and universal life insurance?A UL policy gives the insured person many of the same permanent protection and benefits as whole life coverage, along with the added benefit of a flexible premium to help accommodate variable earnings. In addition, depending on the life insurance company and policy, you may also have the option to invest your cash value in a variety of market-based investment options, giving you the potential for more growth. On the other hand, universal life offers fewer (and/or lower) cash value guarantees. Need some help?Find a financial professional near you who can help Get an instant Term Life quote Go Now Which type of insurance policy offers a flexible premium?Universal life, a form of permanent life insurance provides policyholders with flexibility on paying premiums, a cash savings component, and a death benefit.
What is a flexible premium life policy?Flexible premium life insurance is a permanent life insurance policy where policyholders can adjust payments to meet their needs. As a permanent life insurance policy, flexible premium life insurance builds a cash value over time. You can borrow money against your death benefits.
Are premiums flexible on a whole life policy?Whole life insurance offers consistent premiums and guaranteed cash value accumulation. Universal policies provide flexible premiums and death benefits but have fewer guarantees. You can borrow against or withdraw the cash value with both a whole or universal policy.
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What policy provides flexible premiums cash values face amounts premium paying period and length of coverage?
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