Universal Term Life Insurance instead of Term Life Insurance?
Term life insurance covers the policyholder for a specific period of time, such as 10 or 20 years. Universal life is a type of permanent coverage that can last for the policyholder’s lifetime. In addition to a death benefit (like a term life policy), universal life also has a savings component that builds up over time.
What are the disadvantages of universal life insurance?
Overview of Universal Life
| Pros | Cons |
|---|---|
| Designed to offer more flexibility than whole life | Doesn’t have the guaranteed level premium that’s available with whole life |
| Cash value grows at a variable interest rate, which could yield higher returns | Variable rates also mean that the interest on the cash value could be low |
What type of insurance does Suze Orman recommend?
term life coverage
The biggest reason Orman recommends term life coverage for most people is because this type of policy provides all the protection they need. Life insurance is intended to replace income or services the policyholder provides.
What are the pros and cons of indexed universal life insurance?
Key Takeaways
- Indexed universal life (IUL) insurance policies provide greater upside potential, flexibility, and tax-free gains.
- This type of life insurance offers permanent coverage as long as premiums are paid.
- Some of the drawbacks include caps on returns and no guarantees as to the premium amounts or market returns.