Life insurance and the reason for getting it is a difficult topic to think about. But our clients always tell us that they feel a great sense of relief once they have it in place. Whether you’re looking for term, whole life, or universal life insurance, our team can help you find the right product for your needs.
At Dalena / Benik & Associates, we work with our partner companies to give you access to a wide range of products. And while having a lot of choices is good for competitive prices, it can also make it confusing with information overload. Use the quick guide below to get an overview of the differences between universal, whole, or term life insurance. Then call us and let our friendly staff guide you through the process of purchasing the right life insurance policy so you can be assured your loved ones will have financial security after you’re gone.
Choosing Between Whole, Universal, or Term Life Insurance
When you think of basic life insurance – a payment that is made to your beneficiaries in the case of your demise – you’re probably thinking about term life insurance. Think about it as temporary insurance. You purchase it to cover a given period of time, usually from 10 to 30 years. If you pass away during that time, your beneficiaries get the face value of the policy.
This is generally the least expensive type of insurance and is usually less expensive the younger you are. If you outlive your term life insurance, then the policy generally just expires. You’ll need to buy a new policy. Or you can look at the other types of insurance: universal and whole life insurance.
Whole and universal are both a permanent form of insurance; they don’t expire after a certain term. Instead, you’re covered for life – as long as you pay your premiums. Universal life and whole life are considered “cash-value” insurance because in additional to the death benefits that pay out like a term life insurance, they also have a savings component.
With whole life insurance, your premium will stay the same throughout the life of the policy. Universal premiums can vary, depending on how the cash value is used and allocated. In many other ways, they are very similar, with most of the differences focusing on how the excess is invested and allocated.
Because you’re putting additional value into these forms of insurance, it will have higher premiums than the basic term life insurance. Think of is as combining some of the characteristics of investing with insurance. But this points out one of the criticisms and caveats for buying whole or universal life insurance: some investment advisors sell these policies to a client who may only need term life insurance.
This is why we recommend you work with us, insurance specialists, to be certain that your life insurance needs are met first. Call us for a no-obligation evaluation of your current situation with recommendations to meet your personal life insurance needs.