Universal life insurance (often shortened to UL) is a type of permanent life insurance, primarily in the United States of America. Under the terms of the policy, the excess of premium payments above the current cost of insurance is credited to the cash value of the policy. The cash value is credited each month with interest, and the policy is debited each month by a cost of insurance (COI) charge, as well as any other policy charges and fees which are drawn from the cash value, even if no premium payment is made that month. Interest credited to the account is determined by the insurer, but has a contractual minimum rate of 2%. When an earnings rate is pegged to a financial index such as a stock, bond or other interest rate index, the policy is a "Equity Indexed Universal Life" contract.
Some coverage example:
v Final expenses, such as a funeral, burial, and unpaid medical bills
v Income replacement, to provide for surviving spouses and dependent children
v Debt coverage, to pay off personal and business debts, such as a home mortgage or business operating loan
v Estate liquidity, when an estate has an immediate need for cash to settle federal estate taxes, state inheritance taxes, or unpaid income taxes on income in respect of a decedent (IRD).
v Estate replacement, when an insured has donated assets to a charity and wants to replace the value with cash death benefits.
v Business succession & continuity, for example to fund a cross-purchase or stock redemption buy/sell agreement.
v Key person insurance, to protect a company from the economic loss incurred when a key employee or manager dies.
v Executive bonus, under IRC Sec. 162, where an employer pays the premium on a life insurance policy owned by a key person. The employer deducts the premium as an ordinary business expense, and the employee pays the income tax on the premium.
v Controlled executive bonus, just like above, but with an additional contract between an employee and employer that effectively limits the employees access to cash values for a period of time (golden handcuffs).
v Split dollar plans, where the death benefits, cash surrender values, and premium payments are split between an employer and employee, or between an individual and a non-natural person (e.g. trust).
v Non-qualified deferred compensation, as an informal funding vehicle where a corporation owns the policy, pays the premiums, receives the benefits, and then uses them to pay, in whole or in part, a contractual promise to pay retirement benefits to a key person, or survivor benefits to the deceased key person's beneficiaries.
And more. Call us today for a free quote
v Final expenses, such as a funeral, burial, and unpaid medical bills
v Income replacement, to provide for surviving spouses and dependent children
v Debt coverage, to pay off personal and business debts, such as a home mortgage or business operating loan
v Estate liquidity, when an estate has an immediate need for cash to settle federal estate taxes, state inheritance taxes, or unpaid income taxes on income in respect of a decedent (IRD).
v Estate replacement, when an insured has donated assets to a charity and wants to replace the value with cash death benefits.
v Business succession & continuity, for example to fund a cross-purchase or stock redemption buy/sell agreement.
v Key person insurance, to protect a company from the economic loss incurred when a key employee or manager dies.
v Executive bonus, under IRC Sec. 162, where an employer pays the premium on a life insurance policy owned by a key person. The employer deducts the premium as an ordinary business expense, and the employee pays the income tax on the premium.
v Controlled executive bonus, just like above, but with an additional contract between an employee and employer that effectively limits the employees access to cash values for a period of time (golden handcuffs).
v Split dollar plans, where the death benefits, cash surrender values, and premium payments are split between an employer and employee, or between an individual and a non-natural person (e.g. trust).
v Non-qualified deferred compensation, as an informal funding vehicle where a corporation owns the policy, pays the premiums, receives the benefits, and then uses them to pay, in whole or in part, a contractual promise to pay retirement benefits to a key person, or survivor benefits to the deceased key person's beneficiaries.
And more. Call us today for a free quote
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JUNY PROFESSIONAL SERVICES
8400 KENNEDY BOULEVARD
NORTH BERGEN, NJ 07047
(201) 624-8010
8400 KENNEDY BOULEVARD
NORTH BERGEN, NJ 07047
(201) 624-8010
OFFICE HOURS:
Monday - Friday: 9:00 AM - 5:00 PM
Saturday: Closed
Sunday: Closed
Monday - Friday: 9:00 AM - 5:00 PM
Saturday: Closed
Sunday: Closed
