Life Insurance Universal Policies

"Death Benefit Options"

One of the things that life insurance universal policies offer is “flexibility.” There are various options for you when you go with Universal.

So let’s talk about your death benefit options when choosing Universal life.

If you're confused here, not to worry! You can learn more about the basics on What is Universal Life Insurance?

So there are basically 2 universal death benefit options.

Remember, universal is known as being more flexible so you have more options.

• Option A: Your Death Benefit Amount remains level
• Option B: Your Death Benefit Amount increases

Universal Life Insurance Policies
Death Benefit Options

Let’s go over both of these options and what they mean to you.

With Option A, the life insurance universal policies death benefit remains level. So basically if you have a $100,000 policy and after say about 5 years your cash value is at $1,000, your death benefit remains the same. It will remain the same 5, 10, 20 and 30 years from now, however your cash value will continue to grow.

When you die the payout will be $100,000 no matter how much cash value you have accumulated.

Now with Option B, your death benefit increases as the years go by. It is an accumulation of your cash value over time. So let’s say you have a $100,000 universal policy and you choose the increasing death benefit.

After 5 years have passed let’s say your cash value is $1,000 (just an example).

So if you die after 5 years your death benefit won’t be the $100,000 but it will be $101,000 (approximately) and it will continue to increase as the years go by.

It’s important to note that your death benefit amount will increase by the amount of cash value you have accumulated. So in a situation like this the more you pay in premiums, the more cash value you build!

You’re probably wondering why somebody would choose a level death benefit over an increasing benefit.

Here’s why, it all comes down to prices! The increasing death benefit is more expensive than level.

Here is how an increasing policy might look. This is just an example.

Year	Yearly Premium	Cash Value	Death Benefit
1	$480 ($40 a month)	$34.00	$100,034
5	$480	$1,065	$101,065
10	$480	$2,101	$102,101
15	$480	$2,964	$102,964
20	$480	$3,494	$103,494

For more information on the flexibility in your premiums see the following page: Understanding Universal Life Insurance- Premium flexibility.

You should always contact a licensed professional agent when deciding on a life insurance policy. Affordable life insurance can be yours, put an agent to work today!

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