how universal life works
Net premium guaranteed is deposited to to fit cash Protection foraccount life (Annually, semi-annually, quarterly, etc.)
Policy features
The accumulated value drives the policy
• Flexible premiums/benefits • Current mortality costs • Accumulated value builds with tax-deferred market interest • Tax advantages • Policyowner may surrender, withdraw or borrow from the accumulated value* (withdrawals incur a $25 charge and surrenders may be subject to a surrender charge) • Annual report with projection of future policy performance
Security Assured.
Each month – •
Cost of insurance is deducted
•
Expenses are deducted
•
Interest is added to the accumulated value
Universal life remains in force as long as the cash surrender value is sufficient to cover the cost of insurance and expenses. The accumulated value drives the policy, not the premium. This is different than a traditional whole life policy. Generally, as long as the owner pays the guaranteed premium on traditional whole life, there is a death benefit. There is only one premium amount. This premium is usually higher than the universal life premium one chooses to pay. There is no flexibility or range of premiums like there is with universal life. However, you can get almost the same guarantees with universal life that you would get with a traditional policy if you pay into the policy a premium comparable to that found in a traditional plan.
TM
3520 Broadway Kansas City, MO 64111 816-753-7000 www.kclife.com 7208
Most people like the idea of paying a lower premium for their policy, but this makes this policy more subject to interest rate fluctuations. If premiums and interest credited to the accumulated value are not sufficient to cover policy expenses and cost of insurance, then the accumulated value can reduce to zero. Without any cash surrender value, the policy terminates and there is no more death benefit. *Making a withdrawal or borrowing against your policy can have an adverse effect on the death benefit and/or some of the guarantees offered in some universal life plans.
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