Financial Concepts, Inc.
 

First Commitment - Product Universe

The product type and how it is funded determines the potential risk and performance of your insurance.

There are four main product universes to choose from:

Whole Life Universe
(current interest credited/participating whole life)

  • Premiums are generally guaranteed not to change at the illustrated rate.
  • Substantial floor guarantees as to cash value and death benefit.
  • When policy experiences favorable interest earnings and mortality, the favorable experience is credited directly to the policy or through dividends.
  • Favorable interest and mortality significantly increases cash value and death benefit per dollar of premium.
  • While premiums are due and payable each year, whole life can give flexibility if out-of-pocket premiums need to be reduced or skipped since the cash value can be applied to pay premiums.

Universal Life Universe

  • Premiums, cash value, and death benefit are not guaranteed at the illustrated rate.
    Offers flexible premium.
  • Face amount of the policy can be guaranteed not to go below a specific amount if a specified premium is paid.
    Offers potential to accumulate higher cash value per premium dollar than whole life.
  • Generally less substantial floor guarantees as to interest credited on cash value.
  • Does not have a scheduled guaranteed cash value. As a result, there may not be sufficient cash value to allow out-of-pocket premium reduction or skipping.

Variable Universal Life Universe

  • Premiums, cash value, and death benefit are not guaranteed at the illustrated rate.
  • Offers potential to accumulate the highest cash value per premium dollar.
  • Policyowner is responsible for allocating cash values among sub-accounts.
  • Have the fewest guarantees and greatest volatility because the policyowner, rather than the insured, bears the investment risk.

Temporary Coverage Universe (Term)

  • Provides highest death benefit per premium dollar.
  • Premiums generally increase over time.
  • Becomes more expensive than a permanent contract.
  • Coverage not available at life expectancy.

Next Step: Once you have decided on the product, decide whether you want to make a high, mid-range, or low annual premium.