• www.owningdogs.com 5:03 am on February 12, 2010 Permalink

    Universal Life is about 3 times the price of term life insurance. It pays a HUGE commission to the sales person because it has SO many fees to you.

    Want to invest money – put it in a good growth mutual fund with a 10+ year track record. Worried about taxes? Do it inside a Roth IRA, regular IRA, or a 401K/403b.

    The other bad agrument by many sales people is that if you cancel the universal life – you get your $$ back…. um no you don’t- you get SOME – but if you are paying hundreds of $$ every month for 3 years – I bet you don’t get back what the difference would be between term insurance (at about $45 a month) and what you are paying for the universal life.

    UL is good for the insurance company and the sales person!

  • insuranceguytx 5:04 am on February 12, 2010 Permalink

    Both are tools designed for a specific purpose.

    I like both my hammer and my screwdriver in my toolbox but would not use one when the other works better.

    Term Life Insurance works very well if the insured dies during ther term OR manages to save A LOT of money during his/her life. Enough to pay all of his/her own bills now and in the future.

    By the way, a person can own both term and permanent insurance (I do).

    *

  • mrsdeli 5:04 am on February 12, 2010 Permalink

    He’s right up there. UL is very expensive. Investing is smart. I still think it’s always good to have a term life policy for a few different reasons. A term policy pay out can help the beneficiary pay any funeral costs and unpaid medical expenses. If your spouse or child is the bene, with the right amount on the policy, they can pay the costs and then have something leftover for them….especially for a spouse. Most couples have debt and this helps paying that down.

  • mbrcatz17 5:04 am on February 12, 2010 Permalink

    UL costs more than term, a lot more. Then it sells itself as an "INVESTMENT" vehicle.

    I can get better returns on my investment dollars in a mutual fund. I can buy term insurance, invest the difference, and be WAY ahead.

    It’s too expensive, that’s why. It’s too expensive as an insurance policy, and it’s too expensive as an investment vehicle.

  • aaron p 5:04 am on February 12, 2010 Permalink

    I don’t have a problem with UL at all. It works well for people who have a permanent insurance need. I only take issue with people who mis-use it.

  • Mark S 5:04 am on February 12, 2010 Permalink

    These two articles below explain alot. UL policies are whole life. There are five rules to whole life, some or all of these rules apply to UL.

    1) For first couple years there is NO cash in your savings.

    2) When there is cash, it will gain 1-4% interest per year.

    3)You can take a loan- this lowers your face amount. If you repay it, you repay at 6-8%.

    4) The company can take up to 6 months to give you that money you have requested.

    5) Your beneficiaries choose EITHER face amount OR cash value. They don’t get both.Unless, you pay more in premium to allow them to.

    You can get the max coverage with term, pay much less, set up an investment account, access it when you want, do not have to pay interest back, it accumulates interest the first day money is put into it, and you survivors get BOTH face amount AND money accrued in the investments.

  • ISOintelligentlife 5:04 am on February 12, 2010 Permalink

    There are two different types of Universal Life policies and they are very different animals. Variable UL policies are rarely a good investment, in my experience (and they are designed to be an investment.)

    Fixed UL policies I actually prefer to term for several reasons. Because they have a guaranteed death benefit (which VUL do not), they behave very similarly to term policies that simply don’t have an ending to the term. They will build cash value for a few years, but that’s not really the value of a fixed UL. The great benefit is that they have a fixed amount that will be paid on death of the insured, so you won’t end up with nothing the way you do if you outlive your term coverage. (And it’s VERY expensive to convert even a small part of the term to some kind of permanant coverage, even if you only want to cover final expenses.)

  • LifeInsuranceAgent 5:04 am on February 12, 2010 Permalink

    I like UL insurance policies when it is used for the right purposes.

    Many times though, a term insurance policy will take care of the insured’s need for a lower cost.

    UL works for specific circumstances.