Which Policy Is Best For Me: Whole Life Vs. Universal Life Insurance?
Life insurance is one of the most important purchases you can make in your life. Due to its significance, individuals make decisions on what type of life insurance to buy seriously, wanting to protect their loved ones as much as possible, and not leave them with a financial burden.
Despite these best intentions, the world of life insurance can be quite intimidating. A crucial decision when purchasing life insurance is choosing between whole life vs universal life insurance.
Need help getting started on this decision? Read on.
What is the difference between whole life vs. universal life insurance?
When purchasing life insurance, a whole life insurance policy is guaranteed and locked in. Upon signing the paperwork, your monthly payment rates will remain the same throughout your life, and the amount paid out to your beneficiaries is preset. There is no guesswork involved with whole life insurance, and the terms are spelled out clearly.
Comparatively, universal life insurance includes more grey areas. For starters, people with universal life insurance can choose to adjust their monthly payments. If the budget becomes constrained, they can choose to pay less. If they decide they want to increase their payments, this is an option as well. However, these payment adjustments will affect the amount paid out at the end of the policy. So, with that added flexibility comes variability in the actual benefits.
Which is best for me?
Choosing between whole life vs. universal life insurance is an inherently personal choice, based on your preferences. Some individuals like the stability in knowing exactly what they’ll have to pay each month, planning for exactly how much their beneficiaries would receive upon their passing.
For those individuals who require more flexibility in making payments, the universal life insurance option may be more beneficial. Once retirement funds have been filled, and mortgages have been paid off, reducing your monthly payments later in life with less of a payout may make more sense. Of course, these decisions would be best made with the appropriate guidance if you feel you need a more objective perspective.
To find out more information about your life insurance options, contact Schechner Lifson Corporation. Discover how we can make sense of the world of insurance, providing you with the best and most affordable coverage possible.