• Albert Lee, CONTRIBUTOR
  • Graduated UCI with Business Major. I love history and finances.
  • Opinions expressed by Sunpath Contributors are their own.
March 21, 2018 views: 30,239

This is the new type of life insurance that was created to be more affordable and provide just the life insurance benefit of the face amount. It is one of the cheaper type of permanent life insurance on the market, because there are no “bells and whistles” on this policy. It is there to just pay out the face amount, and will pay out as long as you pay the premiums each year.

Pros:
The need for permanent life insurance, but you’re on a budget.
You can choose to officially pay up a policy and never pay another penny, but still have the policy active. And while it is more expensive to do so, it is a guaranteed paid up policy. **
There is a small cash benefit that is based off of how well the Insurance Company is doing. Generally speaking, it is roughly a 1-2% interest on the cash value that has accumulated from paid premiums.
Cons:
Time value of money. A policy worth $10,000 dollars in the 1960’s was a lot of money. Today, while $10,000 dollars is still quite a bit of money, it is not as much as it was in the 60’s. The face amount is locked in Universal Life.
The accumulated cash and interest payments are extremely small, even years down the line, the policy may have little cash value. In many cases, the only way to access the cash is to surrender the policy.

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