Universal Life vs. Whole Life Insurance

There are many types of life insurance coverage on the market today, and many different products designed for consumers of all ages and health statuses. From inexpensive term life insurance to insurance policies for those with serious medical conditions, there is coverage available for virtually every type of consumer. The key to getting the most bang for your life insurance buck, and the most coverage for your dollar, is to shop around and compare policies carefully.

Knowing what you hope to achieve with a life insurance policy is an indispensable first step when it comes to insurance shopping. Until you know what you want from your policy you will have a hard time knowing whether or not you have found good coverage at a good price.

For instance, some consumers will want to purchase only a death benefit. Those consumers may not be concerned about building up a cash value, or investing their premiums for the future. Their only goal is to provide a cash benefit to their loved ones when they die. If that is the goal an inexpensive term life policy may be the best fit. These policies are simple to understand, easy to buy and best of all affordable.

The life insurance game gets a little bit more complicated when it comes to combining investment elements and cash value with the standard death benefit. . In this arena life insurance shoppers have a number of choices at their disposal, including such popular options as universal life and whole life insurance.

These two products have a lot of similarities, but they also have some significant differences. It is important for anyone in search of a new or replacement life insurance policy to understand both the similarities and the differences in these two types of coverage.

For instance, a whole life insurance policy provides a guaranteed cash value, as well as a guaranteed death benefit. Many life insurance shoppers like the guaranteed nature of this type of coverage, and owning a whole life policy can provide excellent peace of mind. Those who own such policies know that they will be able to cash their policies out for a set value if need be. They also know that their surviving family members or other beneficiaries will receive a guaranteed death benefit that can help them to avoid financial hardship in their time of need.

Universal life is somewhat different in its approach to cash value. While this type of coverage does provide a guaranteed death benefit just like whole life, the cash value is not guaranteed. The cash value will fluctuate along with the return of the investments in the account, and the account may be worth more or less than a similar whole life policy.

It is not always easy to determine which type of coverage is the best, since each individual will have different life insurance needs. It is up to each person to carefully evaluate his or her needs when it comes to life insurance. This careful analysis is the best way to get the highest possible benefits for the lowest possible price.