The answer to this question is the same as for all types of life insurance. It depends on the amount of coverage, the age and rate class of the applicant, and what you want the policy to do.
The unique nature of universal life allows for a range of premium, which provides a bit of flexibility not easily duplicated in other types of permanent life insurance.
Licensed Life Agent, Life and Finance/ 50 States, New York
Universal Life Insurance is an insurance Policy that gives you the option to contribute or adjust payments during a specific term. It is low priced and a great benefit for the policy holder due to the option. Universal Life Insurance has all the benefits and riders of a whole life policy. some Universal Life Policy have a cash value accumulation, and an increased benefit, so, EX: If you have a 100k policy and its paying 63.00 a month the forst year as the year may come to maybe 25 years later depending on age when the policy first opened the benefit amount can be one half more or maybe double.
Universal Life Insurance usually costs more than Term Life Insurance, because it covers the insured person to an older age. Universal Life may also have cash value, which is a feature that usually commands a higher premium. However, Universal Life can be paid up by paying premiums a set number of years, and when you look at the amount of Term premiums paid over one's lifetime, Universal Life may end up being cheaper.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
All life insurance costs are based upon life expectancy, earnings and overhead. These in combination result in the cost for one year of coverage. When the period to be protected is longer than one year then there must be consideration given to the total cost of coverage and the earnings the company could anticipate. This is where you get a premium for a 10, 20, or 30 year term policy.
Permanent insurance does not have a “termination” date and as a result must consider every conceivable coverage cost and establish a program where the earnings of the policy will be sufficient to meet those obligations as they arise. Whole Life is the traditional way to handle this issue and the company designs a plan that will provide a level amount of protection for the remainder of the insured’s life in exchange for a level premium.
A universal life policy differs from the whole life policy in that the earnings are not guaranteed. The company maintains a “separate fund.” This fund will have earnings that are different from the general fund. If the earnings are greater the “cost” of the policy will be lower, reflecting the earnings. Because the earnings are not guaranteed they change from year to year. This affects the company’s ability to pay the full death claim. Each company issues an annual statement that shows the values and projected values. The insured can reduce or increase premiums at their own discretion.
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The unique nature of universal life allows for a range of premium, which provides a bit of flexibility not easily duplicated in other types of permanent life insurance.
Permanent insurance does not have a “termination” date and as a result must consider every conceivable coverage cost and establish a program where the earnings of the policy will be sufficient to meet those obligations as they arise. Whole Life is the traditional way to handle this issue and the company designs a plan that will provide a level amount of protection for the remainder of the insured’s life in exchange for a level premium.
A universal life policy differs from the whole life policy in that the earnings are not guaranteed. The company maintains a “separate fund.” This fund will have earnings that are different from the general fund. If the earnings are greater the “cost” of the policy will be lower, reflecting the earnings. Because the earnings are not guaranteed they change from year to year. This affects the company’s ability to pay the full death claim. Each company issues an annual statement that shows the values and projected values. The insured can reduce or increase premiums at their own discretion.