Whole life and universal life insurance are two types of permanent life insurance. Unlike term insurance that guarantees a death benefit payout during a specific period, permanent policies provide lifetime coverage. There are two parts to a permanent policy - a savings portion and an insurance portion. If you are to cancel this policy at any time, you will receive the policy’s cash value minus any fees.
While whole life and universal life insurance are similar, there are differences between the two. Let’s explore these differences and ways to determine the best policy for your needs.
Whole Life Insurance
Whole life insurance in NJ offers coverage for the rest of your life, regardless of how long you live. As long as you pay the premiums each month, your policy stays valid and your beneficiaries will receive the death benefit when you die.
Every time you make a payment, some of the money goes toward the insurance and some goes toward your savings. Your cash value continues to grow with each payment. Because of this, you can expect a nice lump sum of savings as you get older.
Here are some pros and cons to whole life insurance:
Universal Life Insurance
Also known as adjustable life insurance, universal insurance in NJ is flexible and allows you to reduce or increase your death benefits at any time. Similar to whole life insurance, part of your payment goes toward the savings and the other part goes toward insurance.
The advantages and disadvantages to universal life insurance are:
Which Permanent Life Insurance Policy is Right for You?
The best way to find out what type of life insurance policy is right for you is by speaking with a financial advisor in NJ. At Leonard Financial Solutions, we’ll learn about your finances, long term goals and desire for flexibility. From here, we can recommend the best policy for your needs.
Regardless of which policy you choose, rest assured that you are making the right decisions to protect your family. Contact Leonard Financial Solutions today for an appointment.
While whole life and universal life insurance are similar, there are differences between the two. Let’s explore these differences and ways to determine the best policy for your needs.
Whole Life Insurance
Whole life insurance in NJ offers coverage for the rest of your life, regardless of how long you live. As long as you pay the premiums each month, your policy stays valid and your beneficiaries will receive the death benefit when you die.
Every time you make a payment, some of the money goes toward the insurance and some goes toward your savings. Your cash value continues to grow with each payment. Because of this, you can expect a nice lump sum of savings as you get older.
Here are some pros and cons to whole life insurance:
- You can borrow against the cash value of your policy.
- If you surrender your policy, you’ll receive the cash value.
- You can receive your dividends annually in cash, let them accumulate interest or use them to reduce your policy’s premiums.
- Whole life insurance policies tend to be expensive. It’s best to take out this policy when you’re young and rates are cheaper.
Universal Life Insurance
Also known as adjustable life insurance, universal insurance in NJ is flexible and allows you to reduce or increase your death benefits at any time. Similar to whole life insurance, part of your payment goes toward the savings and the other part goes toward insurance.
The advantages and disadvantages to universal life insurance are:
- You can increase, decrease and stop coverage without surrendering your policy.
- You can borrow money from your cash value to cover unexpected expenses.
- Interest rates depend on the market conditions. If things are good, you can grow your savings. If they’re not, you may not get the returns you hoped for.
Which Permanent Life Insurance Policy is Right for You?
The best way to find out what type of life insurance policy is right for you is by speaking with a financial advisor in NJ. At Leonard Financial Solutions, we’ll learn about your finances, long term goals and desire for flexibility. From here, we can recommend the best policy for your needs.
Regardless of which policy you choose, rest assured that you are making the right decisions to protect your family. Contact Leonard Financial Solutions today for an appointment.
RSS Feed
