Retirement Living Benefits

Universal Life Insurance – like all life insurance – is there to help you support your loved ones’ financial future in case you’re not there to provide for them yourself. As your needs and priorities change, a Universal Life Insurance policy lets you adjust your coverage and premiums, too, within policy limits’.

What is Universal Life Insurance?

Universal Life Insurance is permanent life insurance. It is designed to last your lifetime and to help you provide support for your beneficiaries after you pass away. It comes with more flexibility than Whole Life Insurance, because you can make changes to the premium you want to pay, the timing of your payments, and your death benefit while your policy is in effect.

Key features of Universal Life Insurance:

• Flexible premiums
• Ability to accumulate cash value that earns interest, generally tax-deferred
• You can access the cash value during your lifetime for any reason, generally income-tax free
• Your policy lasts your lifetime (as long as sufficient premiums are paid)
• Your policy pays your beneficiaries a lump sum that is generally tax-free, known as the death benefit
• You can choose whether the death benefit is a fixed amount or increases with your policy’s cash value

How does Universal Life Insurance work?

Universal life insurance provides a death benefit and can accumulate cash value —and offer more flexibility than other permanent policies. The amount and length of time you choose to pay your premium determines how much cash value your policy can accumulate. When you make a premium payment, most of that payment is allocated to your policy’s cash value. Then, the cost of keeping the policy in force is subtracted from that cash value every month. In addition, there are different types of universal life products that can offer increased growth potential, including options tied to the market. You may be able to increase the death benefit, and you may be able to lower or even stop your premium payments in the future if the policy has accumulated sufficient cash value.

How much does a Universal Life Insurance policy cost?

The monthly cost of keeping a Universal Life policy in force depends, in part, on your age (as you get older, the cost of insurance goes up), your health, whether you smoke, and the size of the death benefit you want. But that cost is internal to the policy, it’s not something you pay directly. You choose how much premium to pay, within contract limits. You can choose to pay more than the policy costs today and build cash value that can help cover the cost of the policy later. If you have sufficient cash value already, you can choose to pay less than the cost of the policy or even not pay for a while.

Who is Universal Life Insurance best for?

Because Universal Life Insurance offers flexibility – to change premiums or the amount of coverage – it may be a good option to consider if you want coverage to last the duration of your life. It might also be useful if you have big, long-term savings goals and you need both life insurance and an accumulation vehicle to meet them.

Why might I need Universal Life Insurance?

Here are some factors to consider as you discuss options with us to choose the permanent insurance coverage for your circumstances:

• Income replacement: Helping to replace your income can be an important benefit of life insurance to your family. The mortgage still needs to be paid. Utility bills and taxes will come due. And your kids might be heading off to college.
• Changes in your life: Major life changes — getting married, having kids or buying a house — often bring new financial responsibilities. These events can be a good time to think about buying a life insurance policy or increasing your coverage.
• Retirement income: While the main purpose of life insurance is to provide financial support to your beneficiaries, permanent life insurance may build cash value that can also help supplement your retirement².
• Legacy planning: Whether you want to leave wealth to heirs or support causes you care about, Farmers offers insurance products that allow you to control how assets are managed and distributed following your death.
• Business operations: What would happen to your small business without you? Farmers life insurance may help while business partners or heirs adjust to the loss and map out your company’s future.

When might I need Universal Life Insurance?

Depending on your stage in life, there are likely reasons to consider life insurance. Here are some examples:

• Single adults: Life insurance can be a good idea even when you don’t have dependents. There’s a good chance you support people in your life — whether financially or with your time. Proceeds can also help with final expenses. And it may be less expensive to buy a policy when you’re young and healthy.
• Young married adults: Even if you don’t have children, your spouse could be left as the sole provider for your household. Perhaps you take care of aging parents. Because you’re still young, it may be easier to qualify for life insurance at affordable rates (depending on your health history).
• Married adults with children: You might think of life insurance as a necessity when you have small children. But you may also want to consider coverage for both a primary earner and a stay-at-home parent — they both provide essential services to a family.
• Single adult parents: You might be the sole source of income and care for your children. Life insurance proceeds can help provide financial assistance if the unexpected happens.
• Empty nesters and retirees: Your children may be financially independent, but have you considered the ongoing expenses of a surviving spouse? Income and pensions may be reduced, and there might be mortgages or other debts. Life insurance may help prevent a personal loss from becoming a financial loss as well.

Osime Insurance Agency has options that may suit different needs and budgets through various stages of life, along with potential discounts that could help save money. Whether you’re ready to buy a policy or simply want a quote.