Hi, I’m 37 years old, a single parent of two, and a non-smoker. Right now, I have a death benefit policy through my employer, but I’m looking for something more permanent.
Here’s what the AAA Life Insurance agent has offered:
Universal Life (UL) with a $100,000 death benefit, $15,092 cash value by age 70, and a monthly premium of $108.93 (fully paid by age 70).
Universal Life (UL) with a $100,000 death benefit, $17,811 cash value by age 65, and a monthly premium of $119.88 (fully paid by age 65).
These options seem okay to me, but if anyone knows of better deals or companies offering a higher death benefit for a similar price, please let me know. Thanks!
AAA tends to be on the pricier side. Companies like Penn Mutual, North American, and Midland usually offer better rates, depending on your health. Pac Life and Cincinnati Life are also more affordable compared to AAA. You might even be able to get whole life coverage from GBU for similar pricing.
It’s worth speaking with an independent agent who can compare options for you. Let me know if you have more questions!
I’m not a fan of policies that call $15k in cash value at age 70 “paid up,” especially if the death benefit is $100k. Ideally, you’d want 70% of the cash value by that point to feel secure about getting the full death benefit. This policy design feels risky to me.
If you’re after strong guarantees, whole life insurance is the way to go. For more growth potential, you could look into Indexed Universal Life (IUL) instead of a standard Universal Life (UL). If your focus is long-term protection and cash value, it’s often better to buy a permanent policy and include term insurance within it to maximize the death benefit while building cash value. Once your kids are grown, you may not need as much coverage.
@Noe
Guaranteed Universal Life (GUL) policies can be set to pay up at any age with no reliance on cash value. These are essentially permanent term policies that focus solely on the death benefit.
Cade said: @Noe
Guaranteed Universal Life (GUL) policies can be set to pay up at any age with no reliance on cash value. These are essentially permanent term policies that focus solely on the death benefit.
Good point. If this is a GUL policy, it’s a safer option. It’s worth double-checking to confirm.
Cade said: @Noe
Guaranteed Universal Life (GUL) policies can be set to pay up at any age with no reliance on cash value. These are essentially permanent term policies that focus solely on the death benefit.
The agent explained it as being similar to what you’re describing.
BillSmith said: @Noe
Thanks for the detailed response! The policy is labeled as Lifetime Universal Life (LUL). Does that align with what you’re referring to?
I can’t say for sure without seeing the contract, but it sounds like a traditional UL policy rather than a GUL. UL policies can adjust premiums later, which could lead to higher costs in old age if you want to keep the policy active. If you’re looking for lifelong coverage, this design might not be the best fit. It’s always a good idea to explore other options like whole life or IUL if you’re focusing on stability and growth.
Before choosing a policy, figure out how much death benefit you actually need. Remember, the policy from your employer could disappear if you change jobs. Once you know the coverage amount, look at term life options first since they’re generally more affordable. If your budget allows, you can add a permanent policy for extra flexibility.