The difference between "whole life" and "universal" life ins. policy, anyone?

Answer 1

Don't let anybody sell you whole life insurance no matter how much they try to talk it up to you, it is a waste of money.

Whole life is basically a life insurance policy that lets you borrow money from the policy amount, like a Home Equity Line of Credit would.

"Next, you should only look for one type of coverage: Term life insurance. Do not-I repeat, do not-buy any other type of life insurance. There's another kind, called "cash value," which is a colossal waste of money, if you ask me. These cash value policies come in a variety of flavors, including whole life, universal life, and variable life. Just say no to anyone who tries to talk you into one of these plans. They can be more than 10 times as expensive as a term policy, yet you don't need any of the "extras" they come with. In fact, the big added feature of a cash value policy is that it provides an investment component. I won't go into a ton of details here other than to tell you that a life insurance policy is a lousy way to save and invest. So stick to a policy that simply provides life insurance and leave off all the expensive bells and whistles."

Answer 2

A whole life policy is a policy that has a fixed rate and a fixed payout no matter what where as a UL has a flexible payout and a flexible return above the original amount i.e. $100,000.00
Now for the answers about whether someone should get a UL over a Term because with UL policies you cannot really find a whole life policy. the first thing you have to consider and I am not talking about investments Life insurance is not an investment tool it is a way to protect loved one's plain and simple.
The UL policy is good for someone that needs to insure that no matter what their health changes are or their age as long as the premium is paid it cannot change plain and simple and since I cannot tell you if you will not have cancer in 5, 10 or even 20 years from now I cannot say what is best for you I will give an example of what I think should be done as a Life Agent as well as someone that wants the best for his clients.
lets say for this example that the person looking to get the insurance is 25 for both stories first of all you want to get a term policy for as long as you can not a 10 year and every 10 years get a new one I can explain that but it would take forever anyway the 25 year old needs $500,000.00 of life insurance so he gets a 30 year term at $45.00 a month for 30 years now when he is 55 years old if he is as healthy as he was when he was 25 his rates for the same amount of coverage for a 20 year because as soon as he hit 50 he could no longer get a 30 year policy his rates for the 20 year would be pretty close to $200.00 a month but if he had cancer or something like that could be as high as $422.00 if not higher for 20 years if you qualify yes you would have to qualify again. Ok that is one side the other one would be like this
You get a UL policy for $100,000.00 to $200,000.00 you would be talking about a $39.00 to 60.00 a month and a term for the rest $400,000.00 for $37.28 or $300,000.00 for $29.05 (I know all you math majors are going to tell me that it cost more to do that but hold on) ok after 30 years you would still have the UL policy and its rates would still be the same for the rest of your life yes until you die then if you need to you can pick up what ever you needed at that time in term however if you would not qualify at that time you would still have the term there are other aspects of UL that I cannot go into here because there are a few different types and I don't want to get into trouble IM me though and I will help you out rahnside I am a Licensed Life Specialist in 20 states and if I am not in the state that you are in my partner is and I will get you in touch with him remember be careful from who you get advice and yes I am even talking about myself you need to find someone who has at least a knowledge of the insurance field and not just a finance background yes like I said earlier Life Insurance is not an Investment that you will look to make money off of but like the article that someone copied and pasted from yahoo finance cannot give you the advice except for what they read I hope this is helpful for you send me an IM if you need any other help rahnside
A Life Insurance Specialist
Rahn Sidebotham II

Answer 3

Rahn Sidebotham II's answer is a little longer than necessary.

Both whole life and universal life are types of insurance policies that are designed to provide permanent insurance.

The insurance company takes upon itself the greatest amount of risk with whole life. It's a "set-and-forget" type of contract. And, it typically has the highest cost (premium).

With universal life, the insurance company shares more of the risk with the policyowner. So, the cost (premium) is lower. It is NOT set-and-forget type of contract (unless it comes with a no-lapse guarantee).

In a perfect world, you save enough money to eliminate the need for life insurance later in life. In that perfect world, you buy term until your life insurance need goes away.

But, this is not a perfect world. Some people may still feel a need to have life insurance for their survivors when they die in old age. For those people, permanent life insurance is available.

Of the two, universal life is a more cost-effective way to provide a permanent plan of insurance.

(By the way, as good as some of Suze Orman's advice is, she is not very knowledgeable about life insurance or annuities.)

Answer 4

Universal life means it is applicable everywhere you go around or not based on place of stay. Whole life means entire life but may be having travel restrictions in that. If you are traveling a lot make sure that it is Universal and if you want a full life opt for whole life if not for a limited period of your travel.

Answer 5

universal life insurance is for astronauts