Limitation of Universal Life Insurance

1321 Words5 Pages
Apply the information in the article to explain to Jason the necessary details for making a buying decision. 1. Introduction Jason, age 25, buys a universal life policy (ULI) with a level death benefit of $100,000. His annual planned premium that can be changed is $445. Jason is unsure about whether or not to proceed with this Universal life policy or whether to surrender it and buy another since the premiums are complex (he also has to pay Administrative charges and Mortality costs aside from his monthly premiums) and he receives only $251 at the end of the first year. Jason wonders how ULI compares to other types of life insurance. Being too that he is only 25, he may be able to find another type of policy that can give him better run for his money. However, if Jason decides to surrender, he would have to do it now, since if he surrenders at the end of the first year, he would not receive his $251, and his surrender value is zero because of the surrender charge. The point of this essay, therefore, is to determine whether or not it would be worthwhile for Jason to hold onto his universal life policy or to relinquish it, right away, for an alternate life policy. The essay discusses factors that will impinge on Jason's decision such as premature death; amount of life insurance to own; types of life insurance; and the Limitation of Universal Life Insurance. Working through these issues will help us come to some decision. The first thing that Jason would need to be aware
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