Compare Life Insurance: Whole vs. Universal
When searching for life insurance coverage, it’s always important to compare to ensure that you receive the appropriate coverage. To help you clear up differences in types of policies, we will look at whole life vs. universal life insurance so that you can more easily decide on what you need before settling into your policy of choice.
Whole Life Insurance
Whole life insurance is the most common type that individuals purchase. Its purpose is to offer a permanent plan that is to provide protection to your beneficiaries over the course of your life. With this plan, you will normally make monthly payments based on a breakdown of the lump-sum amount that will be paid upon your death. One downside to this type of policy is that the initially configured lump sum amount can’t take into account cost-of-living increases or other factors that can affect the amount needed later.
Universal Life Insurance
The major difference between whole and universal when comparing coverage is that universal life incorporates a savings component that makes it similar to creating a term policy (a policy that assesses the risks involved in insuring you) with a tax-deferred savings account and interest accumulations. Also, because the policy contains this savings feature, over time, your premiums may come out of that account rather than you having to make out-of-pocket payments. This type of policy is mainly suggested for people who feel they need life insurance into their 70s and don’t have another vehicle for savings like a 401k or annuity.
Deciding whey type of life insurance policy you need requires you comparing coverage until you find what you need. So don’t hold back. Conduct as much research as you can to get the best protection possible for your family.
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