Fixed universal life insurance policies provide flexibility by combining life insurance death benefit protection and cash value accumulation with flexible terms under one policy.
Within certain limits, you can adjust when and how much you pay in premiums, and the amount of your insurance coverage in later years, although increases in coverage may require additional evaluation of your health and other factors at that time.
You affect the accumulation of cash values through the amount and timing of your premium payments (see below to learn more about "cash value").
The Genworth Financial companies offer a selection of fixed universal life insurance policies to meet a variety of needs. Request a quote.
Who should consider a fixed universal life insurance policy?
- Families seeking flexibility - premiums can be adjusted as your budget changes
- Those looking for a guaranteed death benefit that will last for a lifetime
- Individuals who want to accumulate cash values within the policy on an income tax-deferred basis
Key benefits:
- May offer a guaranteed death benefit, depending on the policy
- Flexibility that may allow you to reduce or skip payments (within certain constraints) when times are tight, and add additional premiums to bolster tax-deferred cash values when your budget allows
- The more premium you pay, the greater the potential cash value
- Credits any cash values with a guaranteed interest rate. However, if insufficient premiums are paid, the policy may have little or no cash value and may lapse
How it differs from other life insurance policies:
- Flexibility - policyholders can adjust premium payments as desired
- After a certain time period and within certain stated requirements, policyholders can adjust the death benefit amount
- Ability to make additional premium payments to enhance cash value
- Where cash value amounts are sufficient, the policyholder may elect to withdraw money from the cash value or borrow from it. Distributions and policy loans reduce the death benefit
How cash value is determined:
Fixed universal life insurance policies have flexible premiums. A part of each premium payment is used to cover mortality costs and other administrative charges needed to support the policy. Premium paid that exceeds those costs is contributed to the cash value in the policy. Therefore, the amount of the policy cash value, if any, is directly related to the level of premium payments the policyholder chooses to make.
Cash values in the policy are credited with both a guaranteed and non-guaranteed interest rate. The guaranteed crediting rate is usually between 2% and 3%, depending on the policy. Non-guaranteed crediting rates vary over time. They are determined by the insurance company and are based on the returns the company earns on its own investment portfolio. Paying a minimal premium may result in the early termination of the death benefit (the policy lapses) and no cash value accumulation. Paying a high premium amount may result in a guaranteed death benefit for life and significant accumulation of cash value.
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