One key difference between universal and whole life insurance is the way premiums are structured. With whole life insurance, the policyholder is required to pay fixed premiums for the duration of the policy. These premiums are typically higher than those for term life insurance, but they remain the same throughout the life of the policy. With universal life insurance, the policyholder has more flexibility in terms of premium payments. The policyholder can choose to pay more or less than the required amount, as long as the policy's cash value is sufficient to cover the cost of insurance.
Universal Life vs. Whole Life Insurance - What's the difference?
Universal life insurance and whole life insurance are both types of permanent life insurance, which means that they provide coverage for the entirety of the policyholder's life. However, there are some key differences between the two types of insurance.
Another difference between universal and whole life insurance is the way the policies accumulate cash value. Both types of insurance allow policyholders to accumulate cash value through premiums and interest, but the way the cash value is used can differ. With whole life insurance, the cash value is typically used to offset the cost of the policy, which can help to keep premiums stable over time. With universal life insurance, the policyholder has more control over the use of the cash value and can choose to use it for loans, withdrawals, or to pay premiums.
A third difference between universal and whole life insurance is the way the death benefit is structured. With whole life insurance, the death benefit is typically fixed and does not change over time. With universal life insurance, the policyholder has the option to adjust the death benefit as their needs change, as long as the policy's cash value is sufficient to cover the cost of the increased coverage.
If you are considering a purchasing a universal or whole life insurance policy, you should carefully consider these differences and choose the type of insurance that best meets your needs and goals. Concklin Insurance Agency is here to assist you in finding the policy that best fits your unique situation.
