BROWSE

Unbundled Life Insurance Policy

What is 'Unbundled Life Insurance Policy'

An unbundled life insurance policy is a type of insurance policy and planned financial protection that offers money to the insurance policy's beneficiaries when the policyholder dies, as the unbundled life insurance policy has both savings and investment which can be used during the policy holder's lifetime as well.

Unbundled life insurance is another word for universal life insurance.

Explaining 'Unbundled Life Insurance Policy'

Both whole and universal/unbundled life insurance are types of permanent life insurance and have a cash value component in which a portion of each premium payment is saved and invested on the policyholder's behalf. The other portion of the premium goes toward administrative expenses and the death benefit.


However, there is an important difference between these two types of policies. With whole life insurance, the premiums and death benefit are fixed when the policy is purchased. With universal/unbundled life insurance, the premiums and death benefit can be changed during the life of the policy. This can be a desirable feature if the policyholder's needs change.


The universal/unbundled policy also clearly discloses the policy's administrative fees - also called underwriting and sales expense charges - to the policyholder, whereas a whole life policy does not. Thus, in addition to providing flexibility, universal/unbundled life insurance allows the policyholder to see exactly where his or her premium payments are going.

Unbundled Life Insurance Policy FAQ

What are the 4 types of life insurance?

Life insurance policy is of four major types. They are: Whole Life Insurance, Term Life Insurance, Universal Life Insurance, and Variable Universal Life Insurance.

What is variable life insurance and how does it work?

A variable life insurance policy is a contract between you and an insurance company. Its purpose is to meet particular insurance needs, investment goals, and tax planning objectives. This policy compensates your family or others (your beneficiaries) upon your death.

What is universal life insurance and how does it work?

How Does Universal Life Insurance Work? With universal life insurance, payment is made monthly and it's used for two things: One is for life insurance while the other is for savings and investment. It allows you to choose how much premium you pay within a certain range as the policy holder.

What is an unbundled life policy?

An unbundled life insurance policy is a type of insurance that provides cash to beneficiaries should the policyholder die. It contains a savings and investment component that the policyholder can use while alive.

What are the characteristics of an adjustable life policy?

Adjustable life insurance is a mix of term life and whole life insurance that allows policyholders to change policy features, including the period of protection, face amount, premiums, and length of the premium payment period.

Is variable universal life insurance a good investment?

Variable Universal Life: The Good Premium payments cover the cost of life insurance, the commission of the selling agent, and the insurance company's costs and margin. The value of the policy will appreciate with time, as long as the premium payments continue with positive investment returns.

What is the difference between variable life insurance and variable universal life insurance?

Key Takeaways. In a variable life insurance, most of the premiums can be invested in an investment account. A variable universal life insurance policy is a combination of the benefits of a variable policy and a universal—or whole life—policy.

Further Reading


Unbundling the corporation
go.gale.com [PDF]
… the customer has a new baby, it might recommend a particular life-insurance package or … each acquired company will have to go through a similar process of unbundling, shedding unneeded … to success in fractured industries is not just to unbundle, but to unbundle and rebundle …

The unbundling of residential mortgage financeThe unbundling of residential mortgage finance
www.jstor.org [PDF]
… the customer has a new baby, it might recommend a particular life-insurance package or … each acquired company will have to go through a similar process of unbundling, shedding unneeded … to success in fractured industries is not just to unbundle, but to unbundle and rebundle …

Infrastructure financing with unbundled mechanismsInfrastructure financing with unbundled mechanisms
search.proquest.com [PDF]
… the customer has a new baby, it might recommend a particular life-insurance package or … each acquired company will have to go through a similar process of unbundling, shedding unneeded … to success in fractured industries is not just to unbundle, but to unbundle and rebundle …

The unbundled union: politics without collective bargainingThe unbundled union: politics without collective bargaining
heinonline.org [PDF]
… the customer has a new baby, it might recommend a particular life-insurance package or … each acquired company will have to go through a similar process of unbundling, shedding unneeded … to success in fractured industries is not just to unbundle, but to unbundle and rebundle …

The Unbundling of" Japan, Inc.": The Changing Dynamics of Japanese Policy FormationThe Unbundling of" Japan, Inc.": The Changing Dynamics of Japanese Policy Formation
www.jstor.org [PDF]
… the customer has a new baby, it might recommend a particular life-insurance package or … each acquired company will have to go through a similar process of unbundling, shedding unneeded … to success in fractured industries is not just to unbundle, but to unbundle and rebundle …

Banking: Time to unbundle the services?Banking: Time to unbundle the services?
www.sciencedirect.com [PDF]
… the customer has a new baby, it might recommend a particular life-insurance package or … each acquired company will have to go through a similar process of unbundling, shedding unneeded … to success in fractured industries is not just to unbundle, but to unbundle and rebundle …

Universal/Variable life insurance versus similar unbundled investment strategiesUniversal/Variable life insurance versus similar unbundled investment strategies
www.jstor.org [PDF]
… the customer has a new baby, it might recommend a particular life-insurance package or … each acquired company will have to go through a similar process of unbundling, shedding unneeded … to success in fractured industries is not just to unbundle, but to unbundle and rebundle …

The discount to net asset value, unbundling and shareholder interestsThe discount to net asset value, unbundling and shareholder interests
www.tandfonline.com [PDF]
… the customer has a new baby, it might recommend a particular life-insurance package or … each acquired company will have to go through a similar process of unbundling, shedding unneeded … to success in fractured industries is not just to unbundle, but to unbundle and rebundle …



Q&A About Unbundled Life Insurance Policy


What is a cash value life insurance policy?

A cash value life insurance policy is an investment vehicle that combines the features of a

What type of permanent coverage does an unbundled life insurance provide?

An unbundled policy provides permanent coverage.

What is the difference between whole and universalunbundled life insurance?

Whole life insurance has fixed premiums and death benefits, whereas universalunbundled life insurance allows the policyholder to change both.

Why would someone want to purchase unbundled life insurance?

Someone may want to purchase unbundled life insurance because they need more flexibility in their coverage or they need more control over where their money is going.

What are administrative expenses?

Administrative expenses are fees paid to an insurer for underwriting and sales of a policy.

What are some advantages of a cash value life insurance policy?

Cash value policies offer guaranteed level premiums throughout the insured's lifetime at a substantially lower premium cost than an equivalent whole life policy.

How does a universalunbundled life insurance policy differ from a whole life policy?

Universalunbundled policies have more flexibility than whole policies do.