Universal Life Insurance
Protect the people you love when you can no longer be there.
Universal life insurance combines permanent life insurance protection and cash accumulation with the convenience of adjustable rates of interest, premiums, and payment schedules. A portion of the premium covers the pure cost of insurance, and the rest gives you the potential to build cash value. Most universal life policies have a guaranteed minimum rate of return and are tied to a periodically adjusted interest rate.
Flexibility to Change with Your Needs
With a universal life policy, you can vary the amount of your coverage to reflect your life situation. Once your policy has accumulated sufficient cash value, you also can adjust your premium payment.
Options for Loans and Withdrawals
You can take cash withdrawals and loans from your policy, once it has accumulated sufficient cash value. You usually are not taxed on cash you withdraw from your policy until your withdrawals exceed the premiums you have paid.
A Word of Caution
However, loans and withdrawals, adjustments to the death benefit and/or premium, as well as the performance of the portfolio can result in a lower benefit or higher premiums down the line.
Universal Life Pros
- You can choose between two policy designs: one that offers protection plus cash accumulation, and one that focuses on affordable guaranteed protection.
- As your needs change, you can increase and decrease your coverage; coverage increases are subject to underwriting.
- The death benefit usually passes to heirs free of federal income tax.
Universal Life Cons
- Cash accumulation estimates are based on fixed interest rates. The initial rates may be based on market interest rates. If the rates fall, you may need to pay higher premiums.
- Changing your policy’s premium payment or death benefit could affect your policy’s performance and guarantees, leaving you with higher premiums, a lower benefit, or no benefit at all later.
- You may need to pay out of pocket if returns decrease, if you withdraw cash or take a loan, or if current charges increase.
- You have no control over how the policy’s funds are invested.
Universal Life Insurance Might Be Right for You If:
- You want permanent death benefit protection combined with a flexible premium structure.
- You want to be able to adjust your coverage as your needs change throughout your life.
- You are looking to replace or supplement your Federal Survivorship Pension.
- You want the permanent protection of whole life with lower premiums and more flexibility.
We’re Ready to Help
You can call (800) 826-1126 to set up an appointment with one of our licensed Insurance and Investment Consultants. GEBA Consultants understand your federal benefits and work with you to understand your needs and find the best life insurance solution for you. We shop the marketplace on your behalf to find the best plan. GEBA works only with highly-rated, reliable insurance companies, so you can be confident that your benefit will be there when your family needs it.
There are expenses associated with life insurance. Generally, life insurance policies have contract limitations, fees, and charges which can include mortality and expense charges, account fees, underlying investment management fees, administrative fees, and charges for option benefits. Most policies have surrender charges that are assessed during the early years of the contract if the contract owner surrenders the policy.
Life insurance is not guaranteed by the FDIC. Any guarantees are contingent on the claims-paying ability of the issuing company.
Withdrawals of earnings are taxed as ordinary income and may be subject to surrender charges plus a 10% federal income tax penalty if made prior to age 59½. Withdrawals reduce contract benefits and values.