Pros and cons of whole life and guaranteed universal life

 

Whole Life (participating or “par”)

Increasing face amount

Builds guaranteed cash value

Pays dividends which builds higher cash value and increases face amount

Flexible on payments

Cash value protects policy if payments are missed

Paid up insurance

 

Pros: flexible to changing circumstances, earnings build up tax deferred; dividends can allow you to reduce or stop premium payments over time

Cons: more expensive

Best ages to start:   child, 20’s or 30’s

 

Guaranteed Universal Life

Guarantees benefit, if timely payments are made

Fixed Face Amount

Little or no cash value build up

lifetime guarantee depends on timely payments

 

Pros: less expensive , easy to understand.

Cons:  Timely payments required over a long time frame; not flexible to changing circumstances and needs; premium payments likely throughout life span

Best ages to start:  60’s, 70’s or 80’s