Universal Life Insurance Pros and Cons
Posted by Lenny Robbins on Tue, Mar 15, 2011 @ 04:51 AM
One of the benefits of a universal life insurance policy is the flexibility available when structuring the policy. There are indexed universal life insurance policies, variable universal policies, and guaranteed premium universal life insurance policies. They each have their uses.
Regarding the universal life insurance pros and cons, this post will be limited to a discussion of a guaranteed premium universal life policy with minimal or no cash accumulation. The biggest benefit of this policy is the premium remains the same for the life of the policy, and it will be in force when you die. You don’t have to worry about outliving your insurance. The death benefit and premium do not change.
Perhaps the greatest drawback is that universal life policies are generally more expensive than term policies. While this is usually the case it is not always true, especially at older ages. Several major carriers have “table shaving” programs for universal policies. These special situations allow most applicants normally underwritten at higher cost categories to be reduced to a standard rating. In this scenario, the permanent policy could be less expensive (and make more sense) than a term policy.
The beauty of a universal life insurance policy is its flexibility in how premiums can be structured. You need to work with an agent who understands these policies and their nuances. Your needs will determine many of the features chosen for your policy.
As every case is different, your independent life insurance agent can assist you to determine your needs and what insurance product(s) will work best for you. Be sure you are working with an agent that is well versed in universal life insurance pros and cons!
