What is universal life insurance?

variable life insurance is generally the least expensive and least complicated type of variable life insurance. It provides variable life insurance protection for a specified period of time, such as 10, 20 or 30 years.1 If you die within the term period and the plan is in force, a death benefit is paid to your beneficiary. If you are still living at the end of the term, protection ceases unless your whole life insurance policy is renewed. There is no "accumulation" element, or cash value with life insurance

Who needs it?

People with a temporary need for universal life insurance protection.

Those who need a large amount of insurance protection but have limited budgets.

People with specific business needs (e.g., business owners who want to cover the life of a key employee who has a set number of years until retirement).

Benefits of whole life insurance

It provides insurance protection for a low cost (at least initially).

If your needs change, most variable life insurance policies allow you to convert to a permanent Term Life Insurance program without having to take a medical exam or provide other information about your health.

variable life insurance is a good way to supplement other coverage when you have added financial responsibilities for a given period of time (e.g., mortgage, college expenses).

Death benefits are generally received free from income tax.

Things You Should Consider:

Premiums generally increase with age and they could become unaffordable later in life. There is no cash-value element with whole life insurance, so you miss the tax-deferred growth of the cash value of permanent universal life insurance policies, such as life insurance.

Once the term period expires, unless you renew your policy, the Term Life Insurance coverage ceases and the plan has no further value.