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Whole Life To Universal Life

Reasons Behind Converting Whole Life To Universal Life Insurance

While purchasing a life insurance plan most of the people face confusion regarding what sort of insurance plan might be suitable for them. Majority of the people just adopt the idea of getting any life insurance plan for the time being and then switch to the insurance plan that suits them the most. There are many people who go for whole life insurance but later think about converting it to something more useful and appropriate. Universal life insurance is more appropriate for you if you are thinking about something more appropriate than whole life insurance but the issue of converting whole life to universal life insurance can be quite confusing for some people.

Why should you be converting whole life to universal life insurance?

Before converting whole life insurance to universal life insurance, you must first take a look at the type of insurance plan you need. Naturally you must be seeking for a permanent life insurance plan because both whole life and universal life are permanent life insurance plans. Next you must make a list of your priorities and the benefits that you are seeking. In order to reach a final decision you must also understand the nature of both of these insurance plans.

Whole Life To Universal Life

Whole life insurance:

It’s a simple plan that offers the clients with a fixed value of premiums throughout the life but the plus point is that cash value accumulation is guaranteed in this insurance plan.

Universal life insurance:

Universal life insurance is more flexible regarding the value of premiums. The plus points also include the elements of adjustable death benefits and cash value accumulation.

Similarities between whole life insurance and universal life insurance:

Both whole life insurance and universal insurance are permanent life insurance plans. Both of these insurance plans are distributed in two parts:

  • The first part is known as the investment part, it is also known as the savings portion.
  • The second part is known by the name of insurance portion.

You must keep in mind that permanent life insurance is very expensive. If you don’t have sufficient financial power to backup your permanent life insurance plan then its best to go for term life insurance otherwise permanent life insurance plans are best for you.

Permanent life insurance plans basically function in a manner where the part of the premium amount is used as an investment by the insurance company. This investment is made after the insurance portion has been deducted from the premium. Due to this investment, the cash value is accumulated in the accrued form which the insured person can get.

Why universal life insurance is better than Whole life insurance?

Universal life insurance is almost similar to whole life insurance but with more attractive and adjustable benefits. In whole life insurance the premium amount that you have to pay for your entire life would be at fixed value but in universal life it’s flexible. For instance, if you are paying the premium at 500$ but later  on you feel that you need to increase the amount of premium so your family can get more return from your insurance plan so you can easily increase the amount in universal life insurance while this cannot be done in whole life insurance. Death benefits can also be adjusted in the universal life insurance; in short universal life insurance is more flexible while whole life insurance is not.

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