Have you ever wondered about the differences between term and permanent life insurance options? Though every type of life insurance is designed to provide a death benefit, policies can differ in length of coverage, flexibility and timing of premiums, accumulation of cash value, and other factors. While specific details vary by company and policy, there are some basic differences between term, whole, and universal life insurance you should know:
Term Life Insurance
Term life insurance is designed to cover you for a stated number of years, transferring the risk of your death during that period to the insurance company. Term policies do not accumulate cash value and premiums are typically level or fixed for an initial period. Many people choose to purchase term policies to pay off a mortgage or provide for their family in the event of their unexpected death. Because term life insurance doesn’t accrue any value over time, the policy will expire at the end of the term. Generally, term policies have much lower premiums than whole or universal life, though premiums and benefits depend on factors like age, employment, and health status.
Whole Life Insurance
A whole life policy is intended to provide coverage for your entire lifetime – even if you should live to be over 100 years old. During your life, it accrues a cash value at a specified rate and provides a benefit at your death. The obvious advantage of a whole life policy is that it does not expire at the end of a term, and can help you protect and provide for your family at every stage of life. The main drawback is that these policies require more cash flow to fund.
Universal Life Insurance
Universal life, also known as flexible premium or adjustable life insurance, is a variation of whole life insurance. Like whole life, universal life is a permanent policy intended to provide a death benefit at any point in your life and build cash value during your lifetime. The major difference is that universal life policies are eminently flexible: Premiums, cash value, and death benefits can all be scaled up or down (within limits) based on your needs. However, this flexibility also comes with additional risks and you must be mindful to manage your premiums carefully to avoid letting the policy lapse and losing your coverage. This can be done by reviewing an in-force illustration prepared by the customer service department of the company the policy is with. Because of the complexity of this type of insurance, we strongly recommend consulting with a qualified insurance expert who understands your overall financial situation before making changes to your policy.
Still have questions about different life insurance options? Give our office a call at 954-290-5142 or email to info@symfinancialgroup.com to speak with myself or one of our licensed agents who can provide personalized advice. Personalized Life Insurance Quotes can be run from our website by clicking the button at the top of this post.
Brian Symanski - President
Symmetry Financial
4611 S. University Dr.
Suite 475
Davie, FL 33328
954-290-5142
Info@symfinancialgroup.com
Term Life Insurance
Term life insurance is designed to cover you for a stated number of years, transferring the risk of your death during that period to the insurance company. Term policies do not accumulate cash value and premiums are typically level or fixed for an initial period. Many people choose to purchase term policies to pay off a mortgage or provide for their family in the event of their unexpected death. Because term life insurance doesn’t accrue any value over time, the policy will expire at the end of the term. Generally, term policies have much lower premiums than whole or universal life, though premiums and benefits depend on factors like age, employment, and health status.
Whole Life Insurance
A whole life policy is intended to provide coverage for your entire lifetime – even if you should live to be over 100 years old. During your life, it accrues a cash value at a specified rate and provides a benefit at your death. The obvious advantage of a whole life policy is that it does not expire at the end of a term, and can help you protect and provide for your family at every stage of life. The main drawback is that these policies require more cash flow to fund.
Universal Life Insurance
Universal life, also known as flexible premium or adjustable life insurance, is a variation of whole life insurance. Like whole life, universal life is a permanent policy intended to provide a death benefit at any point in your life and build cash value during your lifetime. The major difference is that universal life policies are eminently flexible: Premiums, cash value, and death benefits can all be scaled up or down (within limits) based on your needs. However, this flexibility also comes with additional risks and you must be mindful to manage your premiums carefully to avoid letting the policy lapse and losing your coverage. This can be done by reviewing an in-force illustration prepared by the customer service department of the company the policy is with. Because of the complexity of this type of insurance, we strongly recommend consulting with a qualified insurance expert who understands your overall financial situation before making changes to your policy.
Still have questions about different life insurance options? Give our office a call at 954-290-5142 or email to info@symfinancialgroup.com to speak with myself or one of our licensed agents who can provide personalized advice. Personalized Life Insurance Quotes can be run from our website by clicking the button at the top of this post.
Brian Symanski - President
Symmetry Financial
4611 S. University Dr.
Suite 475
Davie, FL 33328
954-290-5142
Info@symfinancialgroup.com
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