Villa Rose Associates Ltd.

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FOR IMMEDIATE RELEASE

                                         UNIVERSAL LIFE INSURANCE

Universal Life combines pure life protection (term) with a cash value fund that accumulates tax deferred as long as the policy remains in force.

Unlike deferred annuities or single premium life, universal life is purchased chiefly for insurance.  The insurance company deducts certain expenses and the first month's pure insurance protection from the initial premium paid.  The balance of the premium earns market rate interest rate in a cash-value fund which is normally a high-yielding government securities fund.  Each Month thereafter, the cost of an additional month's pure insurance plus expenses is deducted from the cash value fund.

• Advantages:
•  
  • Policy earns tax-free interest at current market rates.
  • Flexible premium payments. Policyholder can choose to pay for its cost with one single payment, payments for five or ten years, or any other payment schedule desired.   Premiums may even be made at different intervals of time or stopped temporarily as long as the next month's policy reserve covers the cost of next month's pure insurance protection
  • Adjustable benefits so a policyholder can increase or decrease the policy face value according to needs.
  • Policy loans are generally at a 6% to 8% interest rate.
  • Investment, expense, and mortality elements are separately defined.
• Disadvantages:
•  
  • Policyholder ends up with neither the most competitive insurance coverage nor the most competitive savings vehicle.
  • Future yield potential is uncertain due to inflation.

Basic Uses of Life Insurance

• Provide financial security for desired beneficiaries.
• Force savings through premium payments.
• Provide for estate liquidity, equalization for heirs, and wealth transfer.
• Fund Repayment of a specific debt, such as a house mortgage.
• Provide for a special need, such as college expenses, to create an estate, or to pay the estate taxes.
• Use split-dollar insurance for key employees.
• Satisfy spouse's claims in a matrimonial settlement.
• Use for business cross-purchase agreements.

Life Insurance Facts

The American Council of Life Insurance (ACLI) provides a free booklet with a step-by-step process of purchasing life insurance.  The booklet provides simple insurance buying tips, how to find an Agent, and the questions to ask an agent.  ACLI is a trade association of more than 600 life insurance companies that together provide approximately 90% of life insurance in the U.S.  They have a free booklet entitled "What You Should Know About Buying Life Insurance" which can be obtained by calling (800) 338-4471.

Note: Both Jeffrey Rosenthal and Margaret Diaz are independent Life and Health Insurance Agents.

Shopping for Insurance

A simple and economical way to shop for term insurance or any insurance is to meet with several agents.  Your concerns are coverage, benefits and cost.

CAUTION: The least expense policy is not always the best value.  The lowest quote for a term policy may require the applicant to requalify for coverage in a few years, while a slightly more expensive policy guarantees coverage at the same rate for a longer period.

Locating A Missing Insurance Policy

Many times when a person dies, the location of his/her insurance policy is known.   The policy may be tracked down through: Missing Policy Search, American Council of Life Insurance, 1001 Pennsylvania Ave, N.W., Washington, D.C. 20004.

The Council also maintains a list of companies that have merged. changed names, or gone out of business.

Keeping Track Of Hidden Insurance Benefits

Many people have insurance coverage that they are unaware of or have forgotten.   If these people die accidentally, it is probable that the insurance payout will not be made because a spouse or next of kin is unaware of the policy.  Keep a file of all insurance policies.  Include those received through credit card companies, auto clubs, credit unions, banks, clubs, associations, etc.

10-Day FREE Look

Most people are not aware that they have up to 10 days after an insurance policy arrives in the mail to cancel it and receive a FULL REFUND.

Insure The Parent, NOT THE CHILD

In order to protect a child, a parent needs insurance on his/her life and not on the child's life.  If a parent dies the child will receive the funds needed for such things as a college education.  An insurance agent may argue that a child's premium is very low and that the insurance policy will protect the insurability of the child should the child become chronically ill. 

It is a Policy of both Jeffrey Rosenthal and Margaret Diaz to NOT offer Life Insurance Policies for children.

Riders

A excellent rider to add to your policy, if your state does not require it, is a AUTOMATIC POLICY LOAN (APL) provision.  This provision prevents accidental cancellation of the policy for non-payment of premiums.  In the event of non-payment it uses any accumulated cash value to make the payments.  However, if there is no cash value the policy will lapse.

Insurance Company Ratings

-CHECK LIFE INSURERS-

This rating system is for an informed insurance consumer, and NOT an endorsement by Either Jeffrey Rosenthal or Margaret Diaz of of any company.

* Only A.M. Best charges for a rating by phone - $2.50 a minute.   Your agent should be able to provide a FREE A.M. Best guide for the proposed Insurance Carrier.

This material is not intended to replace specific advice for your situation.  You are advised to discuss your situation with a qualified attorney, tax advisor, financial advisor, or insurance agent. The rules are quite complex and we did not intend to over-simplify these complicated rules.  Our intention was to familiarize you the the concepts and vocabulary so that you may have an informed discussion with a qualified professional.