How to Negotiate the Best Rate for Universal Life Insurance

It is important to understand that consumers always have the ability to negotiate a better rate for Universal Life Insurance and can always be willing to walk away. This is a terrific benefit a consumer has over a provider, and there are so many providers that looking at only one carrier is not a sensible thing to do. Be a smart consumer and do research because every carrier and policy has different terms, conditions, riders, fees, and guarantees to consider. It pays to compare, just as if you were shopping for business insurance quotes.

To begin, you must understand that there are many different types of Universal Life policies, including traditional/variable, single, fixed or flexible premium, and Option A or B coverage. These options are based on the desired cost, flexibility, and the consumer’s desired level of risk/reward. Spend time with at least two agents, having them tell you the pros and cons of their products, making notes about what you like and what you don’t, and about what fits your personal goals and objectives. Get online and research other people’s experiences. Once you have done your research, obtain quotes from at least two agents, and also check online for direct writers, making certain they are admitted, reputable companies with strong ratings. Compare all the aspects of each policy, including the following:

  • Guaranteed death benefit
  • Administrative fees (expenses and mortality charges)
  • Ability to collect both the proceeds from the cash account and death benefit (Option B)
  • Interest rate minimums/maximums
  • Limitations/penalties for early withdrawal
  • Type, amount, and duration of premium

Now it is time to look at the fine print to determine any hidden fees or terms. It is often considered the greatest drawback of a Universal Life Insurance policy that, if premium payments do not cover the cost of the actual insurance and administrative fees, the policy lapses. Evaluate the cost of obtaining a guarantee that prevents this from happening and negotiate this cost just like you negotiate the premium.

Once you feel comfortable that you are comparing apples to apples, pick the best options and ask your agent for at least five referrals with whom you can talk, so as to get their opinion on the products you are considering and service your agent provides. Make sure you are provided a few recent and a few long-term clients and do not avoid calling them. Remember, they were once in your shoes and should be glad to offer their valuable opinion.

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