In the life insurance market this is the most widely argued topic today.  This page is not meant to solve the issue rather give you some basic facts on the 2 types of insurances.

Term Policies: 

• These policies range from a 5-year to 30-year policy.
• Most are guaranteed premiums during the initial policy timeframe.
• Term is much less in premiums for the same face amount.
• There’s no cash value in the policy (like renting a house).
• Most term policies end from age 65-80.
• Rarely does a term policy pay a claim since people drop the policy due to price increases or it expires before they have a claim or pass away.
• Term can get a large amount of security for your family at a low cost.

Universal Policies:

• These policies have a built in savings account to stabilize premiums.
• Most new Universal policies will pay to age 120.
• You pay more at the beginning so you don’t have to pay more premiums later (like owning a house).
• If you keep the policy over 30 years Universal will be less expensive in the long run.
• Allow you to have permanent protection at a stable premium rate.

When do I buy Term or Universal?
           
     Buy a Term Policy when:

• You can’t afford to get enough life protection in a universal plan.
• You need life insurance for less than 20 years.
• You have a large debt like a Mortgage or Business loan that you will pay off in the future.
• You want your kids to be able to go to college if something were to happen to you while they are young.

     Buy a Universal Policy when:

• You need permanent protection that will stay consistent on prices.
• You are keeping a life plan for 20+ years.
• You want a life policy to be paid up at age 65.
• Your Estate & Tax planning needs.

Many times a person or family would best be suited by a combination of the 2 types of insurance.  The most important thing to remember when buying life insurance is to complete a financial Needs analysis and purchases enough life protection to cover your family’s needs for the future.  Find an agent that you can trust and understand and then explain what your goals are for a life insurance plan and let that agent give you advice.  If it makes sense to you then you just found your answer to Term vs. Universal Life Debate.