What does unbundling in universal life insurance refer to?

Unbundling in universal life insurance refers to the practice of clearly listing the costs associated with the insurance component separately from the investment returns. This approach allows policyholders to see exactly what they are paying for insurance coverage, administrative fees, and the performance of the investment portion of their policy. By breaking down these components, unbundling provides transparency, enabling clients to make informed decisions regarding their insurance and investment choices. This clarity helps consumers assess the value of their policy and aligns their financial goals with the products they are purchasing, as they can see how much is going towards insurance protection versus investment growth.