President, Lane Independent Agency, Southern California
Think of it as apples and fruit. Universal is a type of permanent life insurance. But there are other types of permanent life insurance. Whole life is another type of permanent life insurance. Whole life is a fixed product, whose premium never varies, and whose value increases over time, based on the carrier's investments in your fixed account. Universal is permanent, and will never end, so long as you continue to pay, unlike term whose premiums will increase after the end of a fixed term. However, with universal, the policy value may go up or may go down, based on whatever it is pegged to reflect. It is possible with universal that you may have to put more money in that expected, if the market were to take a serious hit. This would not happen with whole life. A way to avoid this is to buy indexed universal life. It allows the policy to grow with the market, but at a somewhat lower rate, but it prevents the policy to lose money when the market goes down, as it locks in the balance annually. Over time, this actually can give you a better return than a standard universal, even in an overall good market, not just a bad one. Talk to your agent. Thank you. GARY LANE.
Whole life is not the same as universal. They have a few major differences.
Whole life is less flexible with the premium requirements. Generally it's premium doesn't change.
Universal has the ability to be flexible with your premiums, scaling down for slim periods and up for flush ones.
Assuming you don't die during the policy period:
Whole life pays the value of your policy when you hit 100.
Universal pays the value of your policy when you hit 120.
Universal life policies are usually slightly more expensive than whole and have higher growth of cash value.
Whole life policies usually see lower cash value.
Both have great options to invest in the future, though, and both are excellent tools to protect your family.
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Whole life is less flexible with the premium requirements. Generally it's premium doesn't change.
Universal has the ability to be flexible with your premiums, scaling down for slim periods and up for flush ones.
Assuming you don't die during the policy period:
Whole life pays the value of your policy when you hit 100.
Universal pays the value of your policy when you hit 120.
Universal life policies are usually slightly more expensive than whole and have higher growth of cash value.
Whole life policies usually see lower cash value.
Both have great options to invest in the future, though, and both are excellent tools to protect your family.