Permanent Life Insurance Pennsylania PA

Reader’s Question:

I am from pennsylvania and I have been checking permanent life insurance policies online. I’m a little confused about the difference between whole life insurance and universal life insurance. What’s the deal?

Margaret

Scranton, PA

Well, different strokes for different folks, Margaret.

Whole life and universal life offer guaranteed death benefits. Usually the premiums are paid monthly. Both coverages are forms of permanent life insurance.

Whole life insurance is the mainstay of the permanent life product line. A portion of your monthly premium pays a defined amount toward the accumulation of tax-free cash value. The carrier generates this whole life policy’s cash value by investing in funds. Often whole life policies pay dividends based upon the provider’s annual income and expenses. These dividends are not guaranteed though. Whole life policies allow for loans against the cash value. The premiums are constant throughout the life of whole life policies.

Universal life combines elements of term insurance with money market investments. There is no guarantee on the return of this investment and the rewards fluctuate more than with whole life.

Margaret, when choosing between whole life and universal life in Pennsylvania, you should be clear in your expectations. As you would with any other investment outline your goals, ask good questions and protect your beneficiaries.