Universal Life Insurance

Universal Life Insurance Feature: Life Insurance Benefit Options

In this series, we will walk you through many common features of a typical universal life insurance policy.

Life Insurance Benefit Options

Universal life insurance policies usually offer a choice of three death benefit options. Because your policy can be purchased for a variety of business or personal uses, it's important to select a life insurance benefit option in line with your intended policy use. The life insurance benefit options are:

Option 1 — is the policy's face amount, and is generally a level amount.
Option 2 — is the face amount, plus the cash value that has accrued within the policy, usually resulting in a higher death benefit for your beneficiaries.
Option 3 — especially valuable in a split dollar business arrangement, equals the policy's face amount plus the adjusted total premiums (total premiums paid, less any partial surrenders).