The short answer is Universal Life.
Whole life is much more expensive than universal life (UL), so unless your wealthy or under 40, universal life generally makes more sense. To get the quality elements of whole life, considering adding a few whole life features to a regular UL.
Increasing face amount
Endow at age 100
guaranteed to age 121
guaranteed cash value
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.
| 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.
| Annual Premium |
Face Amount | Product | Carrier | Feature |
| $1,559.00 | $100,000 | Universal Life | North American | Increasing Face Amount: solve $1 at age 100 |
A couple for estate planning purposes may create one life insurance policy that pays out when the last surviving person passes away. The product used for this is called a SUL or Survivor Universal Life. To lock down the death benefit, a lifetime guarantee is usually part of the coverage, so look for the the letter G in the mix, as in SUL-G. It is less expensive to have a joint policy as a couple than two separate individual policies. Also you qualify for coverage even if one of you is uninsurable or in poor health. It’s uses are generally:
Mutual of Omaha uses Dial-A-Guarantee to market their universal life insurance (UL). It’s an apt phrase. You can dial in coverage UL for any age: 90, 95, 100, or whatever to save money. Many carriers offer 30 year term up to age 65, so you can dial in less expensive term to age 95. How long you dial-in coverage is debatable. It’s tough to make it to 100. Then again, recently Fred Buckles, the last U.S. First World War veteran, died at 110. Genworth Life and Annuity’s UL fixed rate maximum is age 110, but has a catch up provision to extend it to age 121. If you do decide to dial-a-guarantee, make sure the coverage has a catch up provision. Stay away from universal life that covers to age 100 and stops. It’s just not necessary when age 120 coverage is not much more. Age 120 UL rates are so good that dial-a-guarantee is generally not worth it. But then again since Genworth’s Term UL has such great rates and a versatile UL extension, you have to take a close look at your options.
One key element to permanent life insurance is the age guarantee. If you’re over age 60, look for something called guaranteed universal life, or GUL for short. The best of these products guarantee coverage at a fixed rate to age 120 or beyond. Banner Life has a good product that guarantees cash value accumulation as well. All you have to do with a GUL is pay on time. The contract provides a lapse protection guarantee as long a you make timely payments.
Whole life insurance was traditionally guaranteed to age 100 with guaranteed cash value. Universal life, UL, came out in 1980’s promising higher returns but took out those guarantees. About the year 2000, carriers introduced universal life with lifetime guarantees. A guaranteed UL is much less expensive than whole life, so much of what you see out there today are guaranteed ULs.
Which company has the best guaranteed UL for you will depend on your age and health. As an independent broker I have access to multiple carrier comparison quote systems not available to consumers on the internet. You can compare term on the internet but not permanent. Let me know, and I show you the top 5 for your age and health.
If you bought cash value life insurance in the 1980’s or 1990’s let me review it for you. It may not be a permanent as you think.
MassMutual is the only life insurance carrier I’m aware of that allows whole life or universal life tobacco policy holders to switch to non tobacco rates, if they have quit tobacco use for one year. So let’s say you smoke cigarettes and plan to quit, um, one day. With an eye to the future, you take out a MassMutual whole life or UL with a tobacco rate. You pay along on your policy, and lo, that steely willpower day comes: New Year’s Eve, a birthday, baby on the way, when you finally quit. Contact MassMutual after a year, fill out a few forms and do a urine sample. You don’t have to all the way through underwriting again; basically it’s a limited set of questions that have to do with smoking. If you’ve developed a nasty smoking related condition along the way: coronary artery disease, cancer, emphysema, to name a few, you won’t be permitted to switch.
Quit pounding coffin nails, before the lid is too tight, and you lower your premium to non smoker rates. Plus your UL or whole life policy cash values perform much better off the tobacco road. Granted, many people never quit, but this a viable avenue for a far better deal on your UL or whole life insurance, and another incentive for quitting to lay down on the path.