If you’re shopping for a permanent life insurance policy, you probably know by now that you essentially have two options–whole life insurance and universal life insurance. How exactly are the two different?
- Whole Life Insurance – Whole life insurance caters to long-term goals by offering policy holders consistent premiums and a guaranteed cash value accumulation. The cash value of the account can be increased over time by paying the premiums, interest accrued on investments, as well as dividends on those investments.
- Universal Life Insurance – Universal life insurance give policy holders flexibility in their premium payments, death benefits, and the savings associated with their life insurance policy. You can increase or decrease the face value of your insurance policy, but you may need to pass a medical examination and if you decrease coverage, you may have to pay a surrender charge.
There are many other ways in which the policies can differ. Both policies have their strengths relative to one another and ultimately the policy that is right for one person may not be the best policy for another. Differing circumstances make it impossible that say that one type of permanent life insurance policy is ideal because different social, family, and economic situations make different types of policies better for different people.
At Bayside Insurance, we can help you assess your situation and determine whether a whole life insurance policy or a universal life insurance policy is a better fit for your needs and your budget.