Discover the truth about what universal life insurance cost
For buyers looking to have life insurance that lasts until death, builds cash value, and offers flexibility in payments and benefits, universal life could be the right choice. Unlike term life, universal life insurance covers you for your entire life. Unlike your whole life, you’ll earn market-based interest on your account balance.
- updated last on March 19, 2023
Universal life insurance premiums
The premiums paid, cash value growth and death benefit are guaranteed not to change in a whole life policy. With a universal life policy, all those options are designed to be flexible. However, the amount of premiums or money you pay affects cash value growth. And if you decide to use funds from the cash value account, it will affect the amount of money your family receives when you’re gone. It might even cause the policy to lapse, so stay in contact with your financial professional to help make sure your life insurance policy continues to meet your needs and goals.
How much does universal life insurance cost?
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Universal life insurance cost calculator
Let’s suppose you are looking to purchase a universal life insurance policy. If this is the case, it would be beneficial to use a universal life insurance calculator to estimate the monthly or annual premium cost and benefits of different coverage options.
An insurance quoting calculator will consider several factors, such as your age, health status, and desired death benefit amount, to estimate the premiums you can expect to pay and the value of your policy over time.
Additionally, many quoting calculators compare different life insurance policies, including UL, Index UL, whole life, and term life. This can help you better understand the good and bad of each option and make a better-informed decision about which policy might be right for you.
Variable universal Life insurance policy cost
The key benefit of a variable universal life insurance policy is flexibility. With a variable universal life insurance policy, you’ll get permanent life insurance with an investment wrapper that accrues a cash value that you can borrow against at a future time.
The insured’s death payout and the – death benefit – are usually a constant figure unless you withdraw funds later into the policy.
On the other side of your variable universal life insurance policy is a pot where a part of the money you pay into the policy every month is saved or invested, meaning it’s accruing cash value. Variable universal life insurance is sometimes viewed as a blend between insurance and a forced investment vehicle for those who find themselves unable to put away money for later.
Unlike regular old universal life insurance, the investment element of a variable universal life insurance policy has separate sub-accounts operating like mutual funds. Values of these sub-accounts may vary because it’s invested in the stock market. Meaning you could see an increased rate of return over a universal life or whole insurance policy. Unlike other insurance types, the policyholder has control over their investments with variable universal life insurance.
The policyholder only needs to pay enough to cover the death benefit and policy fees each month; any additional monies that you may pay are optional and adjustable. Meaning you can put in more money in hopes of a good return.
Be sure to keep an eye on the management fees of the investment options when you choose a variable universal life policy. Unlike other universal life policies, this fee is unique to variable universal life insurance policies thanks to its usage of mutual funds. Critics of this variable universal life insurance note that high fees are a drawback to this type of life insurance.
Universal life insurance rates by age chart
Here are average annual premiums for a $500,000 universal life policy compared with whole life.
Person covered | Universal life | Whole life |
|---|---|---|
Male, 30 | $1,722 | $4,265 |
Female, 30 | $1,499 | $3,753 |
Male, 40 | $2,630 | $6,490 |
Female, 40 | $2,243 | $5,607 |
Male, 50 | $4,311 | $10,273 |
Female, 50 | $3,837 | $8,798 |
Male, 60 | $7,351 | $17,040 |
Female, 60 | $6,299 | $14,465 |
Source for all rates: Quotacy. Average of lowest three rates for each age for healthy applicants. Age of the person covered is at issuance. | ||
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Guaranteed universal life insurance rates
You should know five things before buying a guaranteed universal life policy.
1. Coverage is basically lifelong.
Like term life, guaranteed universal life lasts for a set period. But instead of picking a term length, you can choose the age the coverage will end, typically between 90 and 121 years old. Because it is pretty rare to live to the upper end of that age range, guaranteed universal life is considered lifelong coverage.
In some cases, you can pick a younger expiration age, such as 75. The younger the period, the cheaper the premiums because you are more likely to outlive the policy, making it less of a risk to the carrier.
If you reach the expiration age, possible it’s to extend the coverage, but the new premiums could be significantly more expensive.
2. Cash value growth is negligible.
Cash value accounts are the investment feature of these permanent policies like whole life insurance, which kick in part of the premium into an account that grows tax-free over time. Although guaranteed universal life policies technically have a cash-value account, they usually don’t warrant enough growth to rival permanent coverage.
If in the market for coverage with significant investment opportunities, you may consider cash value life insurance policies that focus on growth.
3. Premiums are cheaper than whole life policies.
GULI is cheaper than permanent coverage such as whole life because it emphasizes cash value growth. This makes it appealing to applicants looking for simple, lifelong, low-cost coverage. Suppose you are older and aren’t interested in building up an investment.
4. Coverage might be a good fit for some seniors.
Rates are generally based on one’s age and health, so getting affordable life insurance for seniors can be hard to find. Term life is the cheapest option, but it is often unavailable for applicants in their 80s. And whole life insurance policies are costly at that point in life.
Guaranteed universal life policies tilt toward term rates when term life is no longer available. This is where it can help fill the gap, and it is much cheaper than a whole life policy at an older age. However, issue ages for guaranteed universal life policies can reach the 80s, making this critical coverage available to some older applicants.
5. Death benefits and premiums are flexible.
Guaranteed universal life insurance is known for its flexibility, which makes it appealing. It can adjust the face amounts, policy length, or the frequency of payments as your needs change.
Frequently Asked Questions
Is universal life policy worth it?
Universal life policies can be worth it, depending on your situation and needs. These policies often provide valuable coverage but can come with high premiums, so it's important to weigh the pros and cons before you make a decision. Speaking with an experienced insurance expert for personalized advice about whether a universal life policy is right for you is advised.
What is the disadvantage of universal life insurance?
The main disadvantage of universal life insurance is that it can be an expensive form of coverage. It may only fit some budgets due to the additional charges for the policy that come along with it, such as premium payments and account fees. Additionally, many universal life policies have added features like living benefits or cash value that can be complex to understand and pricey if you need to manage them better.
How much for a million dollar universal life insurance policy?
The cost of a million dollar universal life insurance policy depends on various factors, including age, health and lifestyle. Depending on these factors, the cost can range from around $200 to $400 per month.
About Coach B.
After starting his financial career with Phoenix Home Life Insurance Company back in 1992, Scott decided he wanted to provide people with an easier and more enjoyable way to buy life insurance. That was the start of Coach B. Life Insurance, whose mission is to be transparent, honest, and helpful to customers — without ever bugging or pushing them.
In the years since then, he has worked tirelessly to improve the process of shopping for insurance. His goal is to make sure that everyone who comes to Coach B. — whether they end up buying a policy or not — has the best possible experience.
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