Whole life and Universal Life are two types of permanent life insurance.
Whole life can be participating or non-participating. Participating can receive dividends, whole life typically has guaranteed premiums and cash values. The "investment" is done for you and the policy does not require much if any management other than paying the premium.
Universal Life is more flexible than whole life, it is an "unbundled" permanent insurance policy. The premium is flexible between a minimum and maximum. You can choose between various cost of insurance options such as yearly renewable term or level. You have a variety of investment options to choose from. In short you get to, and need to make decisions to manage the policy.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
Whole Life is designed to last your whole life. Your premiums will cover the the cost of insurance protection until the day you die, or else pay you the money in a lump sum if you do not die by a certain age. Whole Life also has a savings component that allows you to borrow from the cash value, if you desire.
Universal Life also has the components of insurance protection (death benefit) plus savings (cash value). But UL can be designed in a multitude of ways, and it can be further adjusted while the policy is in existence. E.g. You might want your Universal Life policy to have a large face amount when your children are in the home, but then reduce the face amount to simply pay for final expenses when you are older. You have the flexibility to do that with Universal Life. Not only that, but when you reduce the face amount, you might be able to also reduce or quit paying premiums. Or you can keep paying the same premium and cause your policy to build up extra cash value.
A word of caution when buying Universal Life. It is called permanent life insurance, but it is not guaranteed to be permanent unless you choose a UL policy that states that guarantee. Thankfully, there are guaranteed no lapse UL policies on the market; even those where you can "dial" the guarantee to make the policy last to whatever age you choose. As with Whole Life, if you borrow from the policy, you must pay the money back with interest to ensure that your death benefit will be paid per the terms of the contract.
President, Lane Independent Agency, Southern California
These are permanent forms of life insurance, as opposed to term life insurance, which is temporary, and whose premiums change after a fixed number of years. With Whole and also with Universal, you are building equity, from which you may borrow tax free. With Whole, you have the commitment of the carrier that they will invest your funds and you will appreciate value, never losing. With Universal, you have the ability to appreciate income and tie some or all of it to various markets. With Index Universal, you are guaranteed a minimum, and a maximum, so regardless of the market going up or down, you will not lose and can make quite a bit more than with Whole life. Your call. Thank you. GARY LANE.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Whole life and universal life are the dominant permanent insurance plans. The whole life plan provides a level death benefit for life in exchange for a level premium deposit. The universal life removes the guarantees and provides flexibility in premium payment and even death benefit. The key issue is that the design for both plans is to pay a death benefit. In order to do this they must accumulate cash that is more than necessary to pay immediate death claims. This is because in the future, death claims will far exceed the premiums.
.JPG){kind=avatar}
Whole life can be participating or non-participating. Participating can receive dividends, whole life typically has guaranteed premiums and cash values. The "investment" is done for you and the policy does not require much if any management other than paying the premium.
Universal Life is more flexible than whole life, it is an "unbundled" permanent insurance policy. The premium is flexible between a minimum and maximum. You can choose between various cost of insurance options such as yearly renewable term or level. You have a variety of investment options to choose from. In short you get to, and need to make decisions to manage the policy.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
Universal Life also has the components of insurance protection (death benefit) plus savings (cash value). But UL can be designed in a multitude of ways, and it can be further adjusted while the policy is in existence. E.g. You might want your Universal Life policy to have a large face amount when your children are in the home, but then reduce the face amount to simply pay for final expenses when you are older. You have the flexibility to do that with Universal Life. Not only that, but when you reduce the face amount, you might be able to also reduce or quit paying premiums. Or you can keep paying the same premium and cause your policy to build up extra cash value.
A word of caution when buying Universal Life. It is called permanent life insurance, but it is not guaranteed to be permanent unless you choose a UL policy that states that guarantee. Thankfully, there are guaranteed no lapse UL policies on the market; even those where you can "dial" the guarantee to make the policy last to whatever age you choose. As with Whole Life, if you borrow from the policy, you must pay the money back with interest to ensure that your death benefit will be paid per the terms of the contract.