Universal Life Insurance
Live online universal life insurance quotes right here. Just complete the form to the right, click “To Age 121 Level (No Lapse U/L)” for insurance type and instantly shop from over 150 life insurance companies.
Many of the new Universal Life plans that are guaranteed for life also have a “dial in” guarantee feature. What this means is that you can choose the duration of guaranteed life insurance coverage that you want. So if you don’t want to pay the higher cost of getting coverage that is guaranteed to age 121 or life, you can opt for a less expensive shorter duration guaranteed level rate.
For example, you can buy a Universal Life policy that will have a guaranteed level rate and provide guaranteed coverage to your age 80, 85, 90, etc. These scenarios will be less expensive than getting coverage that is guaranteed to age 121.
For people that are in their late 50′s, 60′s, 70′s or 80′s, the above mentioned “dial in” guaranteed Universal Life rates can be less expensive than term life insurance rates.
Some of the Universal Life co’s are also more lenient in underwriting for their Universal Life products than they are for term insurance. So some people that are “rated” or charged a higher premium for term life insurance due to a health issue, may not be rated for Universal Life insurance.
If cash value or cash accumulation inside of your policy is important to you, then you may need to look into other types of “permanent” life insurance besides guaranteed Universal Life. The reason for this is that most, but not all, of the guaranteed Universal Life policies are not projected to have much cash value and the cash values are not guaranteed.
Currently though, guaranteed Universal Life is the most cost effective life insurance product that is guaranteed to provide coverage for life.
So Universal life and permanent life insurance in general (Whole Life, Variable Life, Indexed Life, etc) can be a complex financial product and cannot be compared based strictly on premiums (which as we’ll describe shortly, are generally a moving target anyway).
Very basically, universal life consists of two parts; an insurance portion and an investment portion or ‘side fund’. Both of these sections vary widely from policy to policy and both directly impact the performance of the policy so it’s important to shop wisely.
The insurance portion of the policy is often called the cost of insurance or COI. The quoting system shown above will provide online quotes for universal life insurance products where the insurance portion and premium paid is fully guaranteed and level to age 121. Other universal life policies may have premiums that are not guaranteed or they may have annually increasing costs, or other variable (non-guaranteed) features. Make sure you know all details before applying.
The investment portion is, roughly speaking, the amount of money you put into the policy above and beyond the amount required to cover the insurance costs. This additional money can conceptually be looked at as going into a ‘side fund’ or account which is then invested by the insurance company. Proceeds from this investment are then typically returned back into the side fund. The single biggest benefit to universal life tends to be that these investment returns are put back into the policy on a tax deferred basis – no tax is payable on these earnings until they are moved from the policy. Insurance companies and agents have worked themselves into a frenzy in an attempt to leverage all the various ways that this tax strategy can be used. It’s important to remember that while beneficial, for many people this investment or tax strategy may not be the best investment for you. Read all recommendations with caution.
What makes these insurance policies difficult to compare is that the two components work together and vary widely by policy. Is it better to have a policy with lower insurance costs, but lower investment returns? Or pay a bit higher insurance costs knowing that while that leaves less money in the investment portion that the earnings on the investment portion will make up for that? Many of these questions are not really answerable and require your best judgment.
Again, the comparison calculator to the right will shop online from only universal life products that contain fully guaranteed and level insurance costs to age 121 or life– and these insurance costs are what are compared. No consideration is given to the investment portion of these policies in these universal life quotes.
If you’ve purchased a Universal Life insurance policy without a guaranteed death benefit or if your old Universal Life plan is now requiring higher premiums to maintain the coverage, you may very well be able to replace that coverage with a new Universal Life policy with a lower rate and that is guaranteed for life.