Reader’s Question:

I am thinking of taking out a life insurance policy for myself. I wanted to know if there are any benefits of having a universal life insurance vs. a whole life insurance.

Thank you.

Mary

Lawton, OK

Well, Mary, if you are young and planning for the future but are reluctant to spend money on life insurance because you believe you have nothing to show for it, go for a universal life insurance.

A universal life policy is definitely recommendable if you want permanent, lifetime coverage. The premiums do not increase if you renew your policy or reapply for a term insurance. A universal life insurance can help pay off debts and your mortgage. A term life insurance policy can also do that but the flexible premium payments and adjustable death benefits are not characteristics of a term life insurance policy.

A term life insurance policy does, however, provide death protection for a specific length of time and also gives the largest immediate death benefit for your money. Some policies are convertible to whole or universal even if you are not in good health.

Universal Life insurance does not offer as many guarantees as whole life does but it can be more cost-effective. All in all, it depends on your needs and your financial situation. It is not an easy decision to make as it affects your entire family not just for the present but for many years to come. Choose wisely!