Which is better Term Life or Universial Life insurance - Knowledge Base: Term Life Cover

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Which is better? Term Life or Universial Life insurance?

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January 21, 2009 - Most term 10/20 will cover you until age 85. As far as Universal Life, it can be purchased in several different fashions. You can set the plan up to be a yearly renewable cost of ...

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Term. ... ... If you want to invest money, get a regular brokerage account or, if it is for retirement, get a Roth IRA. Do not use insurance as an investment. It's there to protect your family.
Depends. In business or older in life, term is the way to go. Younger people should condider whole or universal as an option.
That depends on several factors. ... ... With a universal or whole life policy, you can achieve a "paid up" status and never worry about it again. For the rest of your life, you are insured, but won't need to make payments ever again. Unless the stock market takes a bad turn. The interest that was paying your premium can dry up when the market is weak. You may need to start contributing again to pull it through a bad time. ... ... The rate is established at the time of sale and will never increase. ... ... Term policies are worlds cheaper. You can get hundreds of thousands worth of coverage for just a few bucks per month. But they must be paid every month for life, until you die. And as you age, your premium increases. Weigh that out. Your age and health will determine what rates are offered to you. ... ... When I was 18, I took out a $25,000 universal policy. It was "paid up" after about ten years. This particular policy is very solid. I can count on it to be there for me. Granted, that's not a huge sum compared to other policies, but it will take care of the basic expenses when I die. ... ... I have some term policies that I hope I can maintain until "that day," which represent way more than my little 25k policy. But as I get older I might not be able to afford the increasing premiums. Whatever happens, it will never be a complete disaster, because I have the one permenant policy. ... ... This is one thing I feel good about. I have the one guaranteed policy for a small but reasonable amount; and I have other term policies for amounts that will make my children think they won the lottery.
The question is not a matter of which is better, Term Life or Universal Life. It is the one which best suits your needs and your objectives. Comparing the two types of policies is comparing apples to oranges. ... I will keep this as brief as possible. ... There are different types of Term Life : ... Term to age 100 - Level Premiums ... Term 10 - Renewable every 10 Years ... Term 20 -Renewable evry 20 years ... There are others as well. We will stay with these. ... The 10 and 20 year Term plans have no cash values in the plan. Premiums are less expensive than a Universal Life Plan, in most cases. ... The premiums will increase every 10 or 20 years, depending on the plan. The premiums are normally guaranteed for the term of the plan. Most term 10/20 will cover you until age 85. ... ... As far as Universal Life, it can be purchased in several different fashions. ... You can set the plan up to be a yearly renewable cost of insurance structure. Or a level cost of insurance structure. There are other options, however we will stick with these. ... The plan itself is very flexible, as far as the premiums that you want to pay. ... This plan is used in Estate preservation and Estate planning ... There are Investment options, that you can choose from. ... These Investment accounts are tax exempt. ... The greatest use of a Universal life plan is for the growth of tax sheltered monies. ... I am from Canada. ... However, the same applies I believe in the U.S. ... Cash Values in a life insurance policy are tax exempt. ... This is a great plan if you have a person who has maximized their annual contribution to their personal Registered Retirement plan limit, and have a need for life insurance and need a tax shelter. ... The Universal Life plan can be used to "dump" money into the plan, and have it grow tax sheltered. Of course it varies depending on your Marginal Tax rate. ... ... I have kept this as basic and simple as possible. I hope that helps. Now you must understand that there are other concepts for a Universal Life Plan. To much yo get into on QnA. ... I hope that helps you. ... So to come out and say one is better than the other is not the proper way to look at it. ... Thank you for your time.

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