![]() Universal life insurance policies offer flexible premiums that may allow you to adjust how much you'll pay each year by accessing some of the policy's cash value (though you will need to pay a minimum required amount or the policy will lapse). ![]() Protection that you can't outlive as long as your required premium payments are maintained.Cash value accumulation that you can use while you're still alive.Level premiums that stay the same for the life of the policy.Why should you consider buying whole life insurance?Ī whole life insurance policy can be described as providing life insurance protection with an accumulation feature, and might be a good choice if you want a policy with: Much like universal life insurance, whole life has the potential to accumulate cash value over time, creating an amount that you may be able to borrow against. Whole life insurance policies have a fixed premium, meaning you pay the same amount each and every year for your coverage. This type of policy may also help ensure you can meet premium payments to keep your life insurance policy in force when you fall on hard times because cash value accrued in the policy may be used to pay your premiums. However, withdrawals and unpaid loans will reduce the amount your beneficiary will receive.Ĭash value life insurance allows you to use cash from your life insurance policy while you are still alive. This provides the policyholder with a living benefit and access to cash outside of the death benefit. The cash value of that policy may be made available to the policyholder to withdraw or borrow against. What is cash value life insurance?Ĭash value life insurance is a type of permanent life insurance in which a portion of the policy may build value from interest earnings or grow in investments. They both have the potential to accumulate cash value over time that you may be able to borrow against tax-free, for any reason. That means they're designed to last your entire life and generally won't expire after a certain period of time as long as required premiums are paid. Whole life and universal life insurance are both considered permanent policies. We're hoping the following information will provide you with some basic answers so you have a better understanding of the differences between whole life and universal life insurance. If you've been looking at buying a permanent life insurance policy, chances are you've asked the same questions. ![]() Since both provide a financial benefit to your beneficiaries when you die, how do you decide which policy is the best choice for you? For example, do they both offer cash value that may increase over time? Is one typically more expensive than the other? What are the main differences between whole life insurance and universal life insurance? Differentiating the key aspects between whole life and universal life insurance can sometimes be difficult. Two common types of permanent* life insurance policies are whole life and universal life. ![]()
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