tag:blogger.com,1999:blog-30899967667337986032011-04-21T18:36:35.893-07:00Kyle J. Nortonhttp://www.blogger.com/profile/08867522342451606309noreply@blogger.comBlogger11100tag:blogger.com,1999:blog-3089996766733798603.post-3911861535486879682008-11-08T05:31:00.000-08:002009-04-05T19:42:23.981-07:00Our Sponsors<br /><a href="http://langtonlam.ltcsecrets.hop.clickbank.net/">Long Term Care Insurance Consumer Buying Guide.</a><br /><a href="http://langtonlam.insurleads.hop.clickbank.net/">Insurance Leads Generation.</a><br /><a href="http://langtonlam.tonybahu.hop.clickbank.net/">Annuities: The Shocking Secrets Revealed.</a><br /><br /><br /><a href="http://kylenorton.homemadeen.hop.clickbank.net/"><img style="width: 405px; height: 64px;" src="http://homemadeenergy.org/aff/468x60.gif" /></a><br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://kylenorton.wildmedia.hop.clickbank.net/"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 425px; height: 94px;" src="http://www.foreclosuredefensesecrets.com/images/general16-800x600-blue_02.jpg" alt="" border="0" /></a><br /><br /><span style="color: rgb(0, 0, 0);font-family:verdana;" >As we mentioned in previous articles </span><span style="color: rgb(0, 0, 0);font-family:verdana;font-size:100%;" >UL plans are unbundled, the various components of the plan such as insurance charges and earned interest can each be isolated and quantified. Consequently, they are much easier to understand and to explain than traditional bundled permanent life insurance products. In this article, we will discuss the surrender charge in the universal life policy.</span><br /><span style="color: rgb(0, 0, 0);font-family:Verdana;font-size:100%;" ><br />The surrender charge is the difference between the accumulated fund and the cash value accumulated in the insurance policy that the policy holder can access at any time, often called cash surrender value.<br />Surrender charge schedules are different between insurers and between the UL plans available from each insurer. </span><span style="color: rgb(0, 0, 0);font-family:Verdana;font-size:100%;" >Some plans contain a very heavy level of surrender charges that apply for a lengthy period of time of more than 10 years. These charges serve to artificially suppress the cash values of the policy. </span><span style="color: rgb(0, 0, 0);font-family:Verdana;font-size:100%;" >Other plans have low or no surrender charges at all.<br />Therefore, if </span><span style="color: rgb(0, 0, 0);font-family:Verdana;font-size:100%;" >policyholders who may want to access the cash values of the policy early in the contract will prefer to have lower surrender charges in their plan.<br /></span><span style="color: rgb(0, 0, 0);font-family:Verdana;font-size:100%;" >Higher surrender charges are not necessarily a negative for all policyholders. Heavy surrender charges are ideal for those policyholders using their UL plan as a means of sheltering funds from tax because:</span><br /><br />1. <span style="color: rgb(0, 0, 0);font-family:Verdana;font-size:100%;" >Using low early cash values provides the means for the pricing actuary to inflate future cash values through investment bonuses, thereby enabling much larger cash values in later years.<br /><br />2. </span><span style="color: rgb(0, 0, 0);font-family:Verdana;font-size:100%;" >Surrender charges are used to suppress cash values and cash values are usually compared to a test policy during exempt testing. Therefore, the policyholder can deposit larger amounts into the UL plan in the early years and shelter more funds for a longer period of time. For more details, see the Rules and Regulations section later in this course.<br /></span><br /><span style="color: rgb(0, 0, 0);font-family:verdana;" >I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:</span><br /><br /><a style="color: rgb(0, 0, 0); font-family: verdana;" class="linkification-ext" href="http://lifeanddisabitityinsuranceunderwriter.blogspot.com/" title="Linkification: http://lifeanddisabitityinsuranceunderwriter.blogspot.com/">http://lifeanddisabitityinsuranceunderwriter.blogspot.com/</a><br /><span style="color: rgb(0, 0, 0);font-family:verdana;" ><a class="linkification-ext" href="http://life-insurance12.blogspot.com/" title="Linkification: http://life-insurance12.blogspot.com">http://life-insurance12.blogspot.com</a><br /><a class="linkification-ext" href="http://lifeinsurancexiii.blogspot.com/" title="Linkification: http://lifeinsurancexiii.blogspot.com">http://lifeinsurancexiii.blogspot.com</a></span><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/3089996766733798603-391186153548687968?l=life-insurance15.blogspot.com' alt='' /></div>Kyle J. Nortonhttp://www.blogger.com/profile/08867522342451606309noreply@blogger.com0