Is Universal Life Insurance The Same As Whole Life?
61667 POINTSview profileSteve SavantSyndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale ArizonaWhile both universal life and whole life insurance are permanent products and have a death benefit the similarities end there. Whole life insurance has a guarantee premium for the life of the contract and generally is credited by a dividend or return of unused premium. Universal life gas four policy types: current assumption universal life, guaranteed universal life, indexed universal life and variable universal life. With the exception of guaranteed universal life, the others have flexible premiums or death benefit that can be changed by the policy owner.Answered on August 4, 2013flag this answer
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaBoth Universal life (UL) and Whole Life (WL) are permanent life insurance policies. They are designed to provide coverage for a lifetime. The computations necessary to make a whole life insurance policy are complicated but it wasn’t until the introduction of computers that companies could even think about providing a UL policy. The cash value of a WL policy is held by the company in the company’s general funds. The cash value for a UL policy is held by the company in a separate fund (that might have different results because of investment policy.) So the first difference is that the UL does not have the guarantees of cash accumulation that the WL policy has, however, it might do even better. The second feature of a UL policy is that it is flexible. Premium deposits can be started, reduced, suspended, re-started or modified throughout the life of the policy. This flexibility can be a great asset or a tremendous liability. The liability comes when owners realize that they have not maintained adequate cash values and the rapidly increasing cost of mortality is going to destroy their cash values.Answered on September 19, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is a great question! Yes, universal life insurance is a type of whole life insurance, but at the same time, it's really kind of not. The best way to explain it is that it is a whole life body welded to a term chassis. Just as term policies end after a certain amount of time, the average ul policy will too, if you're not watchful. The average ul policy is only guaranteed for twenty years, and can end sooner, or last longer, depending upon it's investment performance, and the amount of premiums that you pay into it. If properly funded and maintained, it can last your lifetime; if you don't watch for how well it's funded, it can eat its cash value to stay active, and at some point lapse. Confusing? Yup, this isn't a policy for people that aren't wanting to have to pay attention to it, possibly have to increase their premium payments, or who want the safety of not having to worry if they can lose the policy if they make the same payments over a length of time. I hope that helps, thanks for asking!Answered on September 28, 2014flag this answer
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