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Understanding Universal Life Insurance

Trying to decide what to do with your universal life insurance from Thrivent Financial? Or looking for a way you can help protect your family? Whether you already own or are looking to gain protection, we can help.

What can you do with your universal life contract?

Choose the scenario that represents you best:

What is universal life insurance?

Universal life insurance is a type of permanent life insurance. It provides death benefit protection, flexible premium payments and a savings component that has the potential for growth.

Protection, flexibility and choices

Universal life insurance may seem complicated, but it doesn't need to be. So how does it actually work? Take a look at the benefits:

Death benefit

Your death benefit is simply the amount paid to your beneficiaries when you die. It is calculated from your contract's face amount. Life insurance is still one of the most dependable ways you can provide for your beneficiaries in the event of your passing.

You can use our handy insurance calculator to help you estimate how much death protection you need.

Death benefit

Flexible premium payments

Flexibility with finances is important. Getting married, starting a family and sending kids to college are all life-changing events that can influence how much coverage you need. Universal life insurance gives you flexibility in setting your payment amounts and frequency, depending on your financial goals and the amount of protection you're looking for.

Maintaining adequate funding of your contract is important to make sure the coverage will still be around when it's needed.

To find out how much premium is needed to meet your goals and fit your budget, talk to a Thrivent Financial representative or our guidance team.

Flexible premium payments

Cash value

Cash value is essentially a reserve of money, similar to savings, in your contract that grows over time as you make premium payments. Cash value can help you with other financial goals, like retirement or college.2

  • How cash value works

    Two income sources fund cash value:

    • Your regularly and consistently paid premiums.
    • Interest, credited to your account with a rate of at least the minimum guaranteed in your contract.

    These sources combine to provide the potential for long-term growth and help protect against the effects of inflation.

    Monthly deductions are charged to cover the cost of the contract. The monthly deductions include a cost of insurance charge, which generally increases with the age of the person insured.

    It's also important to remember that any contract loans, surrenders or withdrawals can reduce the contract's cash value and death benefit.

    When should you use your cash value benefit?

    The best time to use cash value is for large, planned expenses, such as college tuition, retirement income, growing a business or similar goal. Consider holding off using your contract's cash value for emergencies until you've tapped your other savings.

    How can you use your cash value?

    If you need to access your cash value, you can do so by taking a:

    • Contract loan, which allows you to borrow funds from your contract. Loans can be repaid with interest to restore the death benefit and cash surrender value.
    • Partial surrender, which allows you to withdraw a portion of your cash value. However, your death benefit may be permanently reduced by the amount of the partial surrender. You can take partial surrenders as long as there is enough cash value left in the contract to keep it active.

    Contract loans and partial surrenders may impact your taxes. Work with your financial representative and tax professional for addition information.

Illustration of how cash vlaue works
1 Minus premium expense charges.

Guaranteed purchase options

As your life changes, so does your need for life insurance. Your universal life insurance coverage may have an optional guaranteed purchase option (GPO) benefit or guaranteed increase option (GIO) benefit. These benefits help preserve your ability to purchase additional insurance in the future with no evidence of insurability when needs arise or the funds to buy additional coverage become available.

Guaranteed protection options

Tax benefits

Universal life insurance also features tax advantages that can help you maximize your coverage, including:

  • The death benefit is generally income-tax-free to beneficiaries.
  • Cash value grows on a tax-deferred basis, minimizing potential erosion from taxes.
  • Loans and partial surrenders may be tax-free.2
Tax benefits

Education Resource Center

Using insurance to protect your loved ones is just one part of a sound financial strategy. Learn more about how you can plan your finances to be ready for life goals, wisely.

We're ready to help

Universal life insurance can be a flexible way to protect loved ones.

Contact us now to learn more about how it can help you protect yours.

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Member's Voice

"We chose permanent life insurance because we can build the cash value. I also like the flexibility it offers."*