What Is Universal Life Insurance?

Universal life insurance is permanent insurance that provides protection in case of death, as well as a savings or cash value component. The cash value of a universal life policy is based on the amount of premiums you pay, the declared interest crediting rate and the policy charges of the insurance company. Unlike term life insurance or whole life insurance, flexible premium universal life policies permit flexibility in the amount and timing of premium payments (within limits), and they generally offer you the ability to vary the death benefit amount based on your circumstances.

Universal Life Insurance costs less initially, and offers flexibility in the timing and amount of premium payments, but does not guarantee cash value or death benefit.

• Premium payments are flexible. After initial payment, you make additional premium payments at virtually any time and in any amount (subject to certain minimums and maximums).
• Your policy continues as long as there is enough cash value to cover monthly insurance charges.
• Cash value earns interest at a rate set periodically by the insurance company and generally guaranteed not to drop below a certain level.

You can choose one of two death benefit options:

• Level benefit equal to the policy’s original face amount,
• Variable benefit equal to the original face amount plus any existing policy account value.

Advantages of Universal Life Insurance

• You can determine the amount and timing of premium payments, within certain limits.
• You can increase or decrease the face amount.

Disadvantages of Universal Life Insurance

• Fewer guarantees than Whole Life Insurance.
• Skipping payments can lead to policy funding problems.
• Adding guaranteed features, like a No Lapse Guarantee or Lapse Protection Rider, can increase the cost of Universal Life.
• Growth in cash value in the policy is limited.
• No investment flexibility.
• A decrease in the death benefit may result in the imposition of surrender charges.
  

Life insurance is issued by AXA Equitable Life Insurance Company (NY, NY). Universal life insurance is co-distributed by AXA Distributors, LLC and AXA Advisors, LLC, members FINRA, SIPC. AXA Equitable, AXA Distributors and AXA Advisors are affiliated companies and do not provide legal or tax advice. All guarantees are based on the claims-paying ability of AXA Equitable. The guarantees do not apply to  investment portfolios.

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