Understanding the "Spread" in Universal Life Insurance Crediting Rates In traditional Universal Life (UL) policies, the **Spread** (or margin) is a key concept that impacts the actual interest rate credited to the policyholder's cash value.…
The Use of Permanent Life Insurance for Key Employee Retention (Executive Bonus Plans) Permanent Life Insurance is a valuable tool for businesses seeking to reward and retain top talent through a strategy known as a…
Understanding the Policy's Face Amount: Death Benefit vs. Cash Value The **Face Amount** is the most misunderstood term in Permanent Life Insurance. It represents the base death benefit amount the insurance company is contractually obligated…
Universal Life's Policy Review: The Critical Need for Stress Testing Due to the flexible, non-guaranteed nature of Universal Life (UL) and Indexed Universal Life (IUL), an annual review must include a **stress test**—a simulation of…
Actuarial Risk Classifications: How Gender and Smoking Status Affect Premiums The premium you pay for Permanent Life Insurance is fundamentally tied to the statistical probability of the insurance company paying a claim. This probability is…
The Use of Whole Life as an Emergency Fund: High Liquidity, Low Risk While traditional financial advice recommends keeping an emergency fund in a high-yield savings account, a well-funded Whole Life policy can serve as…
Policy Loan vs. Withdrawal: Understanding the Tax Implications of Each Accessing the cash value of a Permanent Life Insurance policy involves two primary methods—a loan or a withdrawal—with critically different tax consequences. The rule of…
The Use of Whole Life Insurance in Buy-Sell Agreements for Small Businesses For businesses with multiple partners, a **Buy-Sell Agreement** is essential for continuity. Whole Life insurance is often the preferred funding vehicle for this…
The Risk of Variable Life Policies: When Cash Value Performance Falls Short Variable Life Insurance (VL) offers the highest potential for cash value growth among permanent policies, but this comes with the greatest risk: the…
Understanding Policy Dividends as a Return of Premium (Non-Taxable) A key tax benefit of participating Whole Life insurance is the way the Internal Revenue Service (IRS) treats policy dividends. Unlike dividends received from stocks or…