Jumbo Life Insurance Policy Overview
Jumbo Life Insurance is designed for the Ultra High Net worth individuals whose net asset value is more than US$ 1 Million. These individuals maintain reasonable living standards and have access to the best medical facilities anywhere in the world. Their insurance needs are quite different from the wider population, and they require large amounts of insurance. Hence, this exclusive policy is made for them at a meagre cost.
The jumbo insurance helps create a substantial cash estate free of any kind of encumbrance, such as government or third-party debt exposure, as the policy is kept in an Offshore Trust. It also helps ensure a fair distribution of the wealth to all the family members, where some members can inherit the business, and others can be provided through jumbo insurance.
|Age entry||18 Years to 80 Years|
|Plan Type (whole of life insurance)||Universal Life Insurance|
|Indexed Universal Life Insurance|
|Minimum Face amount||$ 1 million|
|Maximum Face amount||$ 100 million (Above)|
|Most Falling in the Range||$5M – $20M|
|Premium paying term||10yrs to 20Years|
|Premium payment mode||Monthly /Quarterly/Half-yearly/Annually|
|Risk classes available|
|• Super Preferred1||• Preferred|
|• Preferred||• Standard|
|• Standard Plus|
|No-penalty withdrawal – Partial withdrawal from your account value.|
|Quit smoking incentive|
|Guaranteed Return Investment insurance plan|
The policy can be taken by paying a single premium or multiple premiums. The capital is guaranteed and gets a guaranteed interest every year.
High Net worth clients all over the world prefer this policy for the following purposes:
1)To create a legacy
2)To cover liabilities
3)To ensure business continuity
4)Offshore trust creation
The policy offers flexible options such as liquidity through access to the money from day one. Policy loans are available. It is the best life insurance in UAE which can be used to generate regular income at retirement for the life insured. The insurance can be increased or decreased at any time.
How Do The Investments Work Under A Jumbo Insurance Policy?
There are 3 different investment strategies under the Jumbo insurance policy.
1)Fixed account jumbo insurance policy
2)Indexed account jumbo insurance policy
3)Performance Indexed account jumbo insurance policy
Fixed account jumbo insurance policy
a)Compounds interest daily declared rate
b)Based on the Current credit rate is declared
c)The current credit rate is 4.10%
d)Minimum Guaranteed rate 2%
What Is A Universal Life Insurance Policy & Why Also Called As ULI!
Jumbo universal life insurance policy has cash value and insurance cover for life and is also called universal life insurance – ULI policy. A part of the premium will be invested into secure debt-related instruments in terms of Guaranteed Return on investment. The interest rates are depending on the debt instrument market conditions. It varies from 3% to 5%, with current interest rates of 4.1%, and minimum guaranteed rate of return 2%. Universal life insurance is also called jumbo insurance in the UAE.
How does Universal Life Insurance work?
This policy is mainly designed for high net-worth individuals with an income of more than USD 5 million. It will take out for estate equalisation. For example, consider Mr X has enrolled on this plan with a universal cover amount of USD 10 million for the family of two children. This amount will be equally distributed among the family members in the unfortunate event. Suppose they are running any business based on the business value the amount will be handed over to one son, and the same equalling amount of universal life insurance amount will be paid to another son. So that succession planning will continue.
What Are The Types Of Universal Life Insurance Policies Available In The UAE?
There are 4 different Universal life insurance policies available
- Guaranteed Insurance
- Indexed Universal Life Insurance
- Variable Universal Insurance
- Adjustable universal insurance.
What Is The Disadvantage Of A Universal Life Insurance Policy?
- Starting Cover USD 1 Million.
This universal life insurance policy has a minimum cover amount starting from USD 1 million. It will be suitable for only high net-worth individuals and not for all.
What Are The Benefits Available Under A Universal Life Insurance Policy?
- Loan financing:
Since the premiums are very high under this policy, the bank will finance 80% of the premium based on collateral security.
- Withdrawal amount:
The best part of the universal life insurance policy is that from the 11th year onwards, you can withdraw 5% of the account value without reducing the life cover. Since this policy has a partial withdrawal option, you can consider it a pension with a drawl every year, so both simultaneous benefits are available.
- Bank assignment:
This policy also can be assigned to banks on a collateral basis.
- Offshore Trust account:
Under this policy, we can create offshore trust where we can nominate multiple persons under this policy. It is optional only.
- Locality Bonus:
A Guaranteed Loyalty Credit will be applied to policy values beginning in policy 15th year (described in your policy contract).