We’ve Got The Answers- What are the Costs of Insurance options on a Universal Life policy?


Today's Question: What are the Costs of Insurance options on a Universal Life policy?
 
 
Paul Lalonde, President and Advisor at Twin Power Financial Inc, joins LSM Insurance to discuss the costs of Insurance Policies on a Universal Life, as well and the pros and cons of each type. You can find out more about Paul here.
 
With discussing Universal Life, there are two different cost types: YRT and Level Cost.
 
A YRT is a yearly renewable term. A YRT contract gives you a lower premium upfront, but as you get older, the price goes up as the risk goes up. One advantage to this is you can add more money into it, which gives you more of a savings element early on. However, that can present a problem down the road as the cost up. They can eat into those savings, ergo, causing the policy to actually expire before you, which is not what you want.
 
With the Level Cost, you get a higher premium upfront, however, the guarantees are the the price will never go up and the insurance will never go down (as long as you make your premium). It still gives you the same flexibility as a Universal Life Policy in the sense that you can add money to your contract. This can be helpful for saving purposes or as a safety net down the road.
 
Those are the two types of contracts that you can get with Universal Life. Like anything else, they both have their advantages and disadvantages. It is a matter of weighing out what works for your needs as well as what you are able to provide upfront for your policy.
 
If you are unsure about what works best for yourself, speak to a licensed Insurance Provider; they will help you determine what policy is most suitable for your situation.
 
More Life Insurance questions? We have more answers here!
 
 

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