Permanent Life Policy Options;
Universal, Whole and Guaranteed
Term life insurance is the most common and least expensive type of life insurance, however, a permanent life policy can offer you coverage FOREVER, along with investment opportunities.
There are 3 common types of permanent life insurance and let me help you understand your options.
First, know that all 3 offer life long coverage or in other words, till you die. The main differences is the cash-value component they offer.
Let me explain.
Universal Life
- Cash- value portion is tied to the market indexes- when interest rates are higher, you make more money. With our current record low interest rates, you won’t see much growth. You play the odds with this type.
- When interest rates are high, you pay lower premium and the difference is made up with the cash-value investing the insurance companies does.
- If interest rates are low, your premiums may go up to cover the difference.
- Premiums can fluctuate.
- Typically less expensive than whole life.
- Count on your rates fluctuating.
Whole Life
- You pay premiums for a limited time (certain age or years) but the policy is for life.
- Cash-value component pays out dividends (not guaranteed though) that are re-invested back into the cash-value. This provides protection from “lapsing” the policy.
- You can withdrawl from the cash-value “tax free.” Not always the case with other products.
- If you stop paying the premiums, the case-value will be used to cover it. Less chance to lapse the policy.
Guaranteed Universal Life
- Similar to universal life but not the risk.
- Premiums always stay the same.
- Doesn’t offer a case-value option so no money can be withdrawn early, and also if you don’t make the premium payment- your policy lapses. With the other types, the cash-value is used to cover the premiums so there is less risk for lapses.
- The death benefit never decreases- not the case for the others.
- This is similar to a TERM Life policy but it lasts till you die. No term limit.
Term Life is great but I need coverage for life, this product is perfect- Get started today!