Permanent Life Insurance Policy Options: Indexed Universal, Whole and Guaranteed Universal Life

Quick guide to understanding each Policy type.

2 Types of Life Insurance: Term and Permanent

Let’s look at the different Permanent options.

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 savings opportunities.

There are 3 common types of permanent life insurance and let me help you understand each one.

First, know that all three offer life long coverage to either a specific age or until death. One difference is how the cash-value component earns money.

Let’s take a look.

Indexed Universal Life

Cash – value portion is tied to the market indexes. This means, when interest rates are higher, the cash value earns more money.

Typically less expensive than whole life and premiums can be flexible if needed.

Cash value can be used for policy loans and withdrawals.

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Whole Life

With this type, you pay premiums until age 100.

Unlike term life insurance, which offers coverage for a specific period, whole life insurance provides lifelong protection as long as premiums are paid.

Cash value typically earns dividends or a fixed interest rate yearly.

One of the key features of whole life insurance is its cash value component. As policyholders make premium payments, a portion of the premium is allocated towards the policy’s cash value. This cash value can be accessed by the policyholder through policy loans or withdrawals, providing a valuable source of liquidity for various financial needs, such as supplementing retirement income or covering unforeseen expenses.

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Guaranteed Universal Life

Policy provides a no lapse guarantee as long as premiums are paid as outlined. Policy loans could affect this if used.

Premiums always stay the same.

Builds a small amount of cash value, but only used to supplement premiums in later years.

The death benefit never decreases.

This is similar to a TERM Life policy but it lasts until the age you choose.

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