Universal Life Insurance

BY DAN KAMPANI

Universal Life Insurance is a kind of permanent life insurance plan. It can be seen as a hybrid between term life insurance and whole life insurance. It usually costs more than a term but less than whole life insurance.

COST COMPARISON FOR $500K LIFE INSURANCE
(45 years old female in best health)

– A 30-year term Life Insurance will cost $65.00 monthly.
– A 30-year Return of Premium Term will cost $132.00 monthly.
– Guaranteed Universal Life policy for the same is $253.00 monthly without cash values and covers you until the age of 121.
– Whole Life Insurance with cash values will cost around $670.00 per month and covers you until the age of 121.

If properly structured, a universal life insurance plan can cover you for an entire lifetime, which according to the insurance industry standard goes until age 121. Primarily, there three kinds of universal life (UL) plans:

  1. Indexed Universal Life or IUL offers tax-deferred cash values usually based on S & P 500 and flexible death benefit. Those who believe that they should buy term and invest the difference perhaps should look at universal life with index-option as the go-to product.
  2. Guaranteed Universal Life or GUL gives you guaranteed lifetime coverage without or almost no cash values. There are, however, a few index-linked options that can offer non-guaranteed cash values in the policy but may not offer a lifetime of guaranteed coverage.
  3. Variable Universal Life or VUL offers flexible premium with investment feature and death benefit subject to stock performance.

All three of these of these plans serve different needs. Based on what you want these life insurance plans can be custom-designed to suit the insured. Unlike term life insurance, these plans can cover you for the entire lifetime and therefore the chances of you leaving behind a financial legacy for your loved one become almost 100%. We prefer to discuss in detail before designing a life insurance plan for our clients.

For a quick reference, learn more about the premium differences in term life, universal life, and whole life insurance.

A few of the premier carriers offering universal life insurance