How to Maximize Death Benefits in Universal Life Insurance

In part three of our series on maximizing your universal life insurance policy we’re going back to Rajiv Rebello’s article from Nerds Eye View blog to examine how to increase cash value.

Remember the more you strive to increase your cash value the LESS of a death benefit you’ll want. The more the death benefit, the more Net Amount At Risk (NAR) for the insurance company which will lead to higher Cost of Insurance (COI) charges.

For maximizing cash value we want the LOWEST death benefit possible to retain the policy as a life insurance contract, and thus allow the death benefit to transfer tax free to our heirs.

There are very specific strategies you need to incorporate to get this done, which Rajiv goes into in this article which I discuss here .

But remember, a lot of advisors, even insurance agents will NOT be aware or if they are could steer you in the wrong direction due to the commissions generated by going one way instead of the other, so it’s prudent for you to seek second opinions.

In part two of our series examining the article from Rajiv Rebell at we’re going to talk about how to maximize your internal rate of return on your universal life insurance death benefit.

Remember, and I can not stress this enough, if you are considering a Universal Life Insurance policy (UL) you need to answer 1 question foremost, what are you trying to accomplish with the policy?

If the policy is intended to leave as much to your heirs with as little outflow as possible from you, that is a whole different discussion than trying to generate as much tax-free interest that YOU can access later.

These two things are basically mutually exclusive. If you shoot for A, B will suffer and vice versa.

Given that premise, in this video we’re going to use Rajiv’s illustration to show some counter-intuitive thinking about strategies you would want to incorporate to maximize your death benefit with the minimal amount of premiums paid.

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