if i have a universal life policy and the guaranteed side goes to zero at age 75 does that mean that I lose the death benefit at that age?
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The current side determines when the coverage would actually run out - however, the current side is always subject to change as it reflects whatever the current interest rates are. If the interest rates change, then the current side will change as well. In addition, if the carrier raises their costs of insurance charges under the policy, then the cash value can be depleted even faster thus lowering the current side coverage projection even further.
If you're unsure what you have, you can contact the carrier to send you an up-to-date illustration (a coverage projection citing how long the coverage will remain in force based on today's figures).
It sounds to me as though the policy that you have is a current assumption universal life program rather than a guaranteed universal life program (which can guarantee premiums remain fixed and guaranteed up to age 121). Current assumption policies typically have limited guarantees under their programs and require additional premiums if the cash value is depleted - meaning they will "crash" if the cash value hits $0 (you would therefore need to pay more in premiums above what you're already spending to keep the coverage going or else it will lapse). Guaranteed universal life policies state that even if the cash value hits $0, the coverage will still continue as long as your regularly scheduled premiums are paid.
If you prefer to have something that guarantees coverage for life rather than risking coverage lapsing after age 75, you may want to consider setting up a guaranteed universal life policy.
I hope the information is helpful - please feel free to contact me for help with your coverage and if you have any other questions. Thanks very much.
When you look at the guaranteed death benefit column in your policy, that is the SHORTEST length of time it will stay in effect. That means if your 1) interest rate dropped to the lowest rate right after you got the policy, and 2) the cost of insurance went up to the highest rate right after you got the policy, you can still be assured your policy will last to age 75.
If the interest rate never drops that low, and the cost of insurance never goes up that high, your policy will probably last past age 75...maybe even much longer.
Now, if you asking about whether your policy will lapse if the CASH VALUE drops to 0 at age 75, then that is a different story. The cash value on some UL policies is 0 for many years, and the policy will still stay in effect.
As the other contributor stated, you can get a current illustration to check on these factors. But it is a great question, as you need to understand the terms to read the illustration. Thanks for asking!
Please contact your agent, and get a look at where your policy stands, and what your options are. Good luck, and thanks for asking!
At that point what will happen?
The insurance company could very well send you a bill for a premium that is much, much higher than what you have been paying.
Or, they may want to pay for the policy from your cash value, if that is a provision in the contract.
Either way, you may be faced with options that you just don’t want.
It would be best for you to take charge of the situation now and do two things:
1. Get an in-force report showing current and future values, to see what you can expect on the policy going forward;
2. Shop out the coverage to see if another policy would help you better meet your goals.