Dmitriy Fomichenko, President, Sense Financial
I don't like them both. It is never good idea to combine your insurance and investments together (there could be some rare exceptions but for most people it is not a good idea). If you need insurance - get inexpensive term life insurance. Term is low cost and will enable you to adequate coverage. Then you can invest money left over independently of the life insurance company.
Cash value policies on the other hand are very expensive and in most cases those who own such policies don't have enough coverage. Do your own independent research so that you can have a clear understanding and don't fall the victim of some life insurance salesmen or 'advisor' selling you the policy which will pay them the most commissions.
Francisco Ramirez, President, Insuringmyself.com LLC
Selecting an agent to properly structure a Universal Life policy and that can explain all the nuances is very important. You don't want to face a situation where you find yourself with a lapsing policy or one that has very little death benefit remaining when you thought there would be a very different amount. Also, don't be fooled by some of the high rates of returns that are advertised, those returns are before fees and those fees can be VERY high.
Michael Solari, Financial Advisor
I agree with Dmitriy. One strategy I use with my clients is to layer the term insurance. The concept is that as you age and SAVE (big emphasis on save) you will need less life insurance. One of my clients we did a 15, 20 and 30 year policies. He will need his highest amount of coverage while his kids are young and his mortgage is high. But as they become self sufficient and as he pays down his mortgage there is less of a need for life insurance.
Stephen D. Ambrosini, Financial Advisor
I like them both, although Whole Life is more expensive. The difference is in the guarantees, Whole Life typically is a fixed level premium with guarantee death benefit and cash value. The risk is low because of the guarantees, but you pay for those with higher premiums. Universal Life is more flexible, with limited guarantees but structured corrected can be a wonderful planning tool. Because of the flexibility of payments and cash withdrawal features, I lean towards Universal Life
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If someone is properly guided in their early years (or take the time to educate themselves) about financial planning and investments then they will never have the moment they wish they had a permanent policy in place. The need for life insurance is temporary - someone needs life insurance if they have loved ones depending on them financially. Usually when people start out in life they don't have much savings, have spouse and children depend on them, mortgage to pay, etc. - that is the time they need life insurance. However, life insurance is only pays out if someone passes away. Therefore is is very important that the same person, in parallel, start saving and investing for the future, for the retirement. And then comes point in time when they become self insured. When kids are gone, mortgage is paid and they have enough assets and investments to live comfortably at retirement - there is no need for life insurance, they become self-insured. That is why term make so much sense. It allows to have adequate coverage, for low cost, while freeing up more cash available for investments.
Term is low cost until it's too late and you're left wishing you had a permanent policy. A whole life policy eliminates market risk and does what it's supposed to do - provide INSURANCE. That being said, term life typically is cheap, provided you don't wait too long to get it and are reasonably healthy. We definitely have different opinions on this subject but they buyer, ultimately, needs to decide what will fit his or her needs the best.