1. 5082 POINTS
    J Paul Wilson CFP, CHFC
    Certified Financial Planner, JPW Insurance Retirement Investments, Halifax, Nova Scotia, Canada
    No product is bad it just depends on what your needs are. What you are trying to cover or accomplish,

    It might be bad for you, if you are looking for more guarantees. Universal life policies involve you managing the policy. If you cannot find your policy then you should not have a policy you need to manage.

    If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.

    If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
    Answered on March 30, 2014
  2. 11498 POINTS
    Jason Goldenzweig
    Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
    Every insurance plan available in the market serves a purpose so you can't really say one is "bad," each type of plan just has to be used in the right way. Certain programs are designed to meet certain needs. You're not going to find one plan that meets every possible need you can think of.

    Universal life and whole life are two types of permanent life insurance - universal life has a lot of advantages to it that you wont find in whole life. One of the major parts of permanent programs to remember is cash value. However, many individuals do not realize that when the insured dies, the carrier takes back the cash value and pays out the death benefit.

    Whole life is generally going to be much more expensive than Universal life because of the guarantees inside the policy. Whole life can be a great tool for retirement planning, providing coverage for new borns, and other financial planning when you're buying in your younger years, but can be very expensive in your older years.

    Universal life does not provide the same levels of guarantees inside the policy with regards to the cash value.  The trade-off is the ability to secure lower premiums for the same amount of coverage and create flexible premiums.

    Whole life has been around for decades and decades. When universal life was first introduced into the marketplace (I believe around the 1970s), if the cash value dropped to $0, your policy would crash and not provide you with coverage unless you paid more into it. Around the late 90s/early 2000s, carriers started introducing what's called a "no-lapse UL rider." In short, these riders said that if the cash value goes to $0, but you keep paying your premiums, the policy will still provide the death benefit coverage.

    The majority of universal life policies today will have this rider, now commonly known as Guaranteed Universal Life (GUL), and can be structured to keep the premiums and death benefits fixed and guaranteed for life or up to a specified age (e.g. to age 90, to age 95, to age 100, etc.).  The idea being to maximize your death benefit without overpaying premiums.

    Contact an independent insurance agent/broker to learn more about these two products and which will be more suitable to your needs. If you're buying strictly for the death benefit, you will likely want to look into a GUL policy.
    Answered on March 30, 2014
  3. 21750 POINTS
    Jim Winkler
    CEO/Owner, Winkler Financial Group, Houston, Texas
    That is a great question! I believe that any life insurance is better than no life insurance, so even a universal policy can be a good thing. That said, am I a big fan of them? No, I'm not, and here's why. Term and whole life policies are very simple, straight forward policies. You pay a set premium, at set times, and the end date is clearly defined as the end of the term, or when you pass. Universal policies are not so clear, and often lead to trouble for the buyer, if they are not clearly shown what has to happen for this type of policy to work. There are many moving parts, and this type of policy is not one that you can buy and throw into your drawer and forget about, unless you like surprises. If you would like to see if this policy would be a good fit for you, please feel free to contact me, and we'll go over it. Thanks for asking!
    Answered on July 3, 2014
  4. 7479 POINTS
    Steve Kobrin
    President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
    Why is universal life insurance bad?
    Hmmm. It all depends.

    Do you want the lowest possible rate for temporary coverage? Maybe 10 or 15 or 20 or 30 years? Buy some term insurance. Universal life will be more expensive.

    But of course, the renewal premium could be sky high.

    Do you want very significant cash accumulation, on both a guaranteed and a non- guaranteed basis? Buy whole life insurance. Universal life probably won’t give you the same numbers.

    But of course, you pay extra in premium for those guarantees. And it is a fixed-premium product, so you better keep paying.

    Then again, perhaps you want flexibility on the payment premium schedule. Perhaps you want to put in more money. Or maybe put in less money. Or maybe skip a payment.

    You can do all this with universal life insurance. Just make sure you know what you are doing so the policy still performs as expected.

    Maybe you want to lock in to a premium for the rest of your life and not have to worry about the price ever going up. But you don’t want to pay an arm and a leg for the coverage. You could buy universal life insurance with a lifetime guarantee. You won’t accumulate much cash, but hey, you will have saved a ton of money in premium, as compared to whole life.

    Let’s say you have a chronic medical condition which could pose a higher mortality risk. But you still want to save money on the cost. Perhaps an insurance company will give you a concession on the price?

    Could they do that with term insurance? No.
    Could they do that with whole life insurance? No.
    Could they do that with universal life insurance? Yes, there is a very good chance they could. It’s called table shaving. It’s a perk that has saved people a lot of money.

    What do you think is bad about the product?
    Want to learn more? Read my blog: planrisklive.com
    Answered on October 12, 2015
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