The benefits of comparing life insurance carriers naturally takes you to the most affordable option. This is why it becomes ever more important to work with an independent agency, such as The Sarrica Group, who provides access to multiple insurance carriers. It is equally as important to understand the different life insurance products these carriers offer and the pros and cons of each.
In this blog, we will discuss the differences in certain Life Insurance products and why comparing rates on each of them is so important. Let's dive in!
Term Life
Pros:
Usually cheaper during the first couple of years compared to a Whole Life or Universal Life policy
Can typically go with a higher death benefit amount due to lower costs
Cons:
Has an expiration date
Gets more expensive after term expiration
Does not offer cash value benefit
Whole Life
Pros:
No expiration date
Guaranteed premium
Offers cash value accumulation plus death benefit
Allows borrowing from the cash value without having to repay
Gains interest
Tax shelter investment
Cons:
Usually more expensive compared to a term policy
Universal Life
Pros:
No expiration date
Flexible-Premium (can adjust to fit your financial needs)
Ability to skip payments
Flexibility to changing the death benefit
Interest earned over time accumulate tax-deferred
Cons:
Usually more expensive compared to a term policy
Paying minimum premiums or skipping payments will negatively affect policy's cash value
Now that we understand the difference between the term, whole life and universal life insurance products, we can start to tailor a policy to meet an individual’s needs.
In addition the benefit of comparing multiple insurance carriers and coverages ensures that we are selecting the most affordable policy with the greatest cost-benefit option.