The Ultimate Life Plan is a whole life product which gives you the security of knowing that your loved ones will be taken care of in the event of your premature death. Whole life insurance provides a guaranteed death benefit your loved ones can use as they choose e.g. For college, to pay off a mortgage, or maybe to settle a debt. Planning for your family’s future shouldn’t mean you can’t benefit during your own lifetime, as such ,the Ultimate Life Plan helps build cash values you can use in your lifetime. You could tap into your policy’s cash value that can grow into a sizeable asset to:
- Help pay for your children’s education.
- Add to your retirement income.
- Provide funds for any emergency expense that may arise.
- You can access loans or make withdrawals from your cash value for any number of reasons.
Main death benefits
In the event of death of the policyholder, First Mutual Life pays the predetermined sum assured plus declared bonuses.
At inception of the policy, the applicant is given an opportunity to choose any of the optional benefits which can be added to the main whole life benefit.
i) Additional Accident Cover
The option provides additional death benefit subject to a maximum equal to the death benefit if the insured dies as a result of an accident up to a maximum age of 65 years.
ii) Terminal Illness
Gives the policyholder access to 50% of the policy’s eligible death benefit should the insured be diagonized with a terminal illness.
iii) Disability Waiver of premium
This option gives peace of mind by assuring that valuable insurance coverage is not lost when the policyholder is unable to pay premiums due to disability. With this rider, First Mutual Life will waive all premiums should the insured become totally disabled.
iv) Conversion option
In the event that the policyholder changes his needs, the main death benefit is convertible to an endowment product. The conversion can only be exercised if the policy has been in force for at least 3 years and the new policy term should be at least 10 years subject to premium adjustment.
The main benefit is terminated and the policyholder has an option to continue with the riders. If the optional riders continue, the expiry date should continue with the expiry date of the new endowment policy.
Uses of Ultimate life policy
Ultimate life policy can be used as a method of protecting one’s family assets. Potential uses include:
i)Provision of financial security
ii)Mortgage protection- the policy can help pay off mortgages and other outstanding debts in the event of premature death
iii)Loans –Accumulated cash value can be accessed through loans. The loans may be required in case of emergency needs, help pay children’s educational fees. Loans can only be accessed after the policy has been in force for at least 2 years
iv) Pension maximization – in the event of death of a pensioner who had chosen a single life pension option, life insurance proceeds will replace lost pension benefit.
v)Estate planning- The policy can provide for estate expenses and help to avoid the sale of assets or the need to borrow.
Ultimate life policy can play a role in the smooth operation of a business. It can be used as an attractive employee benefit and as a means to assure the business’s financial future. For example:
i)Executive bonus- the employer purchases the policy on the life of a key employee and pays for that policy as a bonus. The employee owns the policy and has all the rights in the policy.
ii)Buy/sell agreement-Either the corporate or the business entity shareholders purchase an insurance policy on each shareholder. The purchaser is both the owner and the beneficiary of the policies. On death of the shareholder, the remaining shareholders are able to use the life insurance proceeds to purchase the deceased owner’s shares.