Permanent life insurance is either universal life (UL) or whole life. UL is much more affordable, so generally that’s the best choice, unless you’re very well off. But UL’s don’t automatically include whole life’s quality features, so let’s look at three whole life features you can structure into your UL.
Whole Life has a lifetime guarantee. You can add a lifetime guarantee to a Universal Life. For example, let’s take a 59 year old female, best health rate.
- Lifetime Guarantee
| Annual Premium |
Face Amount | Product | Carrier |
| $1,116 | $100,000 | Guaranteed Universal Life | Aviva Life & Annuity |
| $2,995 | $100,000 | Whole | MassMutual |
Both have lifetime guarantees but this guaranteed UL has a level face amount and participating whole life, like this one, the face amount increases over the years. Is that important? It depends how old you are. 59 is a bit young to have a level face amount. What will $100,000 be worth 20 years from now?
So let’s structure the UL with an increasing face amount and quote North American, since they have a critical care rider which allows you to accelerate out your death benefit if you need long term care.
- Increasing Face Amount
| Annual Premium |
Face Amount | Product | Carrier | Feature |
| $1,559.00 | $100,000 | Universal Life | North American | Increasing Face Amount: solve $1 at age 100 |
Now that $100,000 policy is projected to be worth $101k, $102k, 105k, 110k, as they years go by. It’s also much less than whole life. Unfortuately, this UL does not have the lifetime guarantee. Also whole life has guaranteed cash value which is guaranteed to endow, or be worth its face amount, at age 100.
Well, you can structure a UL to endow, non guaranteed anyway. This one is projected endow, be worth $100,000, at age 100. I also structure it to have an increasing face amount.
- Endow
| Annual Premium |
Face Amount | Product | Carrier | Feature |
| $2,189 | $100,000 | Universal Life | North American | Increasing face amount; solve Endow age 100 |
Note how this UL as structured, with an increasing face amount and to endow, is creeping up toward the $2,995 premium of the whole life. There are reasons this UL is still less. This UL does not have whole life’s lifetime guarantee, guaranteed cash value and paid up insurance.
This is a brief comparison but generally in one’s 40’s, 50’s and early 60’s, if you don’t have a whole life, it’s best to have a UL with an increasing face amount. I have not found it worthwhile to structure it to endow, however. It’s better just to use that extra premium to increase the face amount.
What you need is an agent and broker, like myself, to go through all your options, step by step, compare illustrations and come up with a permanent life policy that meets your goals and budget.