Note: my father was a casualty insurance salesman, selling insurance on auto and home, but not life insurance. However, he was a strong believer in life insurance and I agreed with him wholeheartedly until late in life. Now that I'm in my eighth decade of life, I'm not so sure about life insurance. I was lucky; things worked out well for me with regard with insurance. I'm not sure any type of life insurance is the right thing for everyone.
Permanent Life Insurance
Term insurance: completely different. This page is not about term insurance. I don't think I cover term insurance anywhere on this site.
The difference between universal and whole life insurance.
Universal Life Insurance
- savings
- college
- interest-based
- not included in financial aid app
- guarantee 4%
- taxes deferred
- no taxable event on withdrawal of cost basis
- buying in at low interest rate; lucky break
- 9 guaranteed purchase option (GPO) events
- e.g. at ages 18, 21, and 23 (or something like that): can add additional insurance with no physical and regardless of change in medical status; have to sign some paperwork and pay additional premium.
Whole Life Insurance
- dividend-based
- based on Thrivent investment performance
- 6 - 8% historically
- minimum cash value
- minimum death benefit
- not as flexible for college
All permanent insurance was “whole-life” at one time. Then EF Hutton introduced universal life insurance and that has become the preferred option for many (most?).
