Life Insurance 09 – Types of Coverage of Universal Life

As we mentioned in previous articles, UL plans are unbundled, the various components of the plan such as insurance charges and earned interest can each be isolated and quantified. Consequently, they are much easier to understand and explain than traditional bundle permanent life insurance products.In this article, we will discuss the types of coverage of the universal life policy. The following is a list of the various coverage types that are available in the marketplace today.
1. Single life
Single life plans are designed to pay a death benefit when the plan’s only insured dies. This is the most popular coverage type sold today.

2. Multiple life
This plan is designed to provide life insurance coverage for more than one life. A death benefit is paid each time an insured dies. Each insured life can be insured for a different face amount.

3. Joint first to die
A joint first to die plan covers multiple lives ,typically it is used to cover two lives under one plan. Some insurers will allow more lives . . . often up to five lives. It pays only one and first death benefit. The costs are higher than those applicable to each of the individual lives but still lower than the total mortality cost of the individual lives since only one death benefit is payable. Many insurance companies allow an option whereby the remaining survivor(s) of a joint first to die plan can purchase coverage on their lives without medical evidence or underwriting conditions at their attained age, as soon as the policy pays on the first death.

4. Joint last to die
A joint last to die plan covers more than one life but pays only one and last death benefit. Joint last to die coverage provides an extremely low cost effective method of covering several lives under one policy, because the death benefit is paid when the last insured dies and the cost of mortality is lower thanthat applicable to any of individual insureds.

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Source by Kyle J. Norton