Universal Life Insurance

Universal Life insurance is a whole of life policy for high and ultra high net worth clients. It provides permanent life cover until the policy holders’ death.

It also provides an encashment value if the policy holder decides to terminate the policy prior to death, however this is subject to the investment returns made on the premium by the insurance company issuing the policy.

If the insurance company’s investment portfolio outperforms the minimum investment return, a higher interest rate may be applied to the cash value of the policy.

The premium can be paid as a single up-front lump sum, or through a series of payments. Around 85% of policies are purchased with a one-off lump sum using premium finance by a bank.

This finance can provide you with up to 90% of the policy’s guaranteed cash surrender value, i.e. the initial premium.

By financing a policy, you can:

  • Buy as much life insurance cover as you need
  • Use the cash saved by financing the premium to invest in higher yielding assets
  • Borrowing allows you to benefit from the investment returns produced by the policy

REASONS TO USE UNIVERSAL LIFE INSURANCE

  • Inheritance Tax Settlement – proceeds from an insurance policy can be used to pay worldwide wealth taxes which becomes due upon the death of the life insured
  • Mortgage Protection – a mortgage may need to be paid off upon the death of the mortgage holder. Cash from a Universal Life insurance policy can be used to pay off the mortgage and leave the family home free of debt
  • Key Person Protection – safeguard a business if a key individual passes away. The cash payout from the policy can help the business through a difficult time, and assist in securing new talent to take the business forward

Enness can put you in touch with expert tax advisors to discuss this. Please remember that taxations depend on individual circumstances and can be subject to change in the future.

HOW CAN ENNESS HELP WITH UNIVERSAL LIFE INSURANCE?

Knowing what type of life insurance you need in different circumstances can be complicated, so our team takes the time to understand your requirements, and works with you every step of the way to source and set up a policy with you.

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