What Will Happen To My Death Benefit If My Cash Value Drops To Zero?

Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Universal Life Insurance and other Life Insurance topics.

What will happen to my death benefit if my cash value drops to zero?

What Will Happen To My Death Benefit If My Cash Value Drops To Zero?

With a universal life insurance policy, the life insurance death benefit is usually paid from the premiums that have been given to the company and the available cash value.
Although you are never guaranteed to have a minimum cash value to withdraw from, you should be guaranteed a minimum death benefit after a certain amount of premium payments have been made - no matter what happens with the investment portion of your account.

   

Comments

9/24/2009 12:47:02 AM
life agent said:

That's not true. Read the policy. Once the CV account hits 0 the policy is in default.


2/8/2010 10:16:01 PM
Yo Prinzel said:

As long as the cost of insurance is being paid, your universal policy should not lapse and your death benefit should be paid even if you have no CV. I have never seen or had a Universal policy that lapsed as long as minimums were paid. Also, default is not generally a term used with life insurance since you are not obligated to pay premiums. You have the right to walk away from your insurance contract at any time.




Name:


URL: (optional)


Comment:


Not finding the advice and tips you need on this Life Insurance Tip Site? Request a Tip Now!


Guru Spotlight
Ray Lokar