Life Insurance Basics

Note:  Any guarantees associated with payment of death benefits, income options, or rates of return are subject to the claims-paying ability and financial strength of the insurer. Policy loans and withdrawals will reduce the policy's cash value and death benefit and may cause the policy to lapse. Withdrawals may be subject to surrender charges and income tax, and a 10% penalty may apply to withdrawals from a modified endowment contract if made under age 59½.

Note:  Variable life and variable universal life insurance policies are offered by prospectus, which you can obtain from your financial professional or the insurance company. The prospectus contains detailed information about investment objectives, risks, charges, and expenses, as well as the underlying investment options. You should read the prospectus and consider this information carefully before purchasing a variable life or variable universal life insurance policy.

*Dividends are not guaranteed.

 

Comparison of Types of Life Insurance

TermWhole LifeUniversal LifeVariable LifeVariable Universal Life
PremiumPremiums increase at each renewalLevelFlexibleLevelFlexible
CoverageUsually renewable until at least age 70; for some policies, up to age 95For lifeFor lifeFor lifeFor life
Death benefitGuaranteedGuaranteedMay be guaranteed, depending on policyGuaranteedMay be guaranteed, depending on policy
May increase with dividends*Can be increased or decreasedVaries relative to cash value investment returnsCan be increased or decreased; varies relative to cash value investment returns
Cash valueNoneGuaranteedGuaranteed minimum interest rateNot guaranteedNot guaranteed
May increase with dividends*Varies based on interest ratesFluctuates with subaccount performanceFluctuates with subaccount performance
Policy loans allowed?Not applicableYesYesYesYes
May be able to borrow up to 100% of total cash surrender value less annual loan interest rateSame as whole life, but usually available at lower net interest rate (i.e., pay the interest rate and get a credit back to the policy)Same as whole life, but usually available at lower net interest rate (i.e., pay the interest rate and get a credit back to the policy)Same as whole life, but usually available at lower net interest rate (i.e., pay the interest rate and get a credit back to the policy)
Cash withdrawals allowed?Not applicableNoYesNoYes
Cash value account growthNo cash value accountInsurer determines guaranteed cash value and declares dividends based on performance of its general investment portfolio*Insurer determines cash value interest crediting rates based on current interest rate returns to the companyCash value account growth depends upon the investment performance of the subaccounts you chooseCash value account growth depends upon the investment performance of the subaccounts you choose

IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2024.