Traditional Universal Life- a type of universal life insurance where the current credited interest rate is declared by the life insurance company that issues the policy. The rate of interest declared is based on economic conditions and competitive conditions in the market environment.

ADVANTAGES OF TRADITIONAL UNIVERSAL LIFE

• Provides coverage for the lifetime of the insured
• Can build strong cash values if funded adequately and/or if interest rates perform
• Guaranteed cash values are available
• Flexible premiums and death benefits
• Optional extended no-lapse guarantees available
• If insured’s health declines, underwriting is not an issue

DISADVANTAGES OF TRADITIONAL UNIVERSAL LIFE

• Can become underfunded due to underperforming interest rates
• Premiums may need to be readjusted
• Not all plans provide a death benefit that is guaranteed for the life of the insured
• Cost of extended no lapse guarantees may increase mortality charges significantly
• Lower potential cash values relative to other UL plans

Value proposition of Traditional Universal Life: flexibility