Universal Life

􀂃 The key characteristic of a universal life policy is flexibility. Within limits, the
applicant can choose the amount of insurance and the premium he/she will
pay. Later, depending on the policy value and policy owner’s financial needs,
he/she can change his/her premium amount.
􀂃 The policy stays in force as long as its value is enough to pay its costs and
expenses.
􀂃 The policy value is "interest-sensitive," which means that it varies in
accordance with the general financial climate.
􀂃 The flexible premium feature of the policy allows the policy owner to change
his/her premium payments, depending on the policy value at hand and his/her
current financial needs.
Example: Policy owner may be able to skip a premium payment or
decrease/increase his/her premium payments.
􀂃 Lowering the death benefit and raising the premium will increase the growth
rate of his/her policy. The opposite is also true. Raising the death benefit and
lowering the premium will slow the growth of his/her policy. If insufficient
premiums are paid, the policy could lapse without value before it reaches a
maturity date.
􀂃 The maturity date is the date the policy ceases and its cash surrender value is
payable if the policyholder is still living. Therefore, it is the policy owner’s
responsibility to consistently pay a premium that is high enough to ensure that
his/her policy’s value is adequate to pay the policy’s monthly cost. The
company must send the policy owner an annual report and notify him/her if
he/she is in danger of losing his/her policy because of insufficient value.

Variable Life

􀂃 A variable life policy allows the policy owner to invest the policy values in a
selection of separate accounts similar to mutual funds. Separate accounts
could include money market funds and mutual funds invested in stocks and
bonds.
􀂃 A variable life policy presents a higher risk to the policy owner because the
cash value varies based on the investment performance of the separate
account.
Variable Universal Life Insurance
Variable Universal life insurance combines the flexibility of Universal life
insurance with the investment account features of Variable life insurance.

Group Life

Some of the silent features of Group Life insurance are listed below:
• A group life policy provides coverage to a group of people under one
contract.
• Most group life contracts are sold to businesses to cover their employees.
• Associations buy group life policies to cover their members.
• Lending institutions buy the policies to cover their debtor loans.
• Most group life policies are for term insurance.
􀂃 Generally, an insurance company issues a master policy, and each person in
the group receives a certificate of insurance. If the employee terminates
his/her employment, the employee may convert to an individual policy and
keep his/her coverage.
􀂃 An insurance company may not apply a new contestable period if the group
life policy has been in force for two years and the insurance amount is the
same or less than the employee’s original policy. If the employee converts
his/her policy before the two-year contestable period ends, an insurance
company may continue the contestable period until the employee reaches the
time limit under the original group policy.
􀂃 If the employee increases the amount of coverage in the converted policy, a
company may apply a new contestable or suicide period only to the increased
amount of coverage.
􀂃 A group life policy isn’t always a low-cost policy. Compare the cost of an
employee’s coverage under a group policy to the cost of an individual policy
and shop around for the best deal. Employers should compare prices and
coverages to get the best group policy for their employees.