Universal and Whole Life (Single and flexible premium) : Suitable?
Structured similarly to Single Premium Variable Life Insurance (SPVLs) and Variable Universal Life Insurance (VULs) but have returns based on interest rates declared by the insurance carrier.
Suitable for:
Suitable investors have the similar needs to the SPVL and VUL investors, but do not want to be exposed to equity market risk. Although the insurance carriers guarantee principal and interest, rates tend to rise and fall in tandem with the general direction of interest rates.
Investors should consider potential performance under lower guaranteed rate scenarios as well as possibly more attractive current rates.
Provides a death benefit with no cash value build up. Term is often used for family protection purposes.
It is generally suitable for clients with a need for insurance for a limited time period (5 – 20 years).
May be Unsuitable for:
Since term premiums rise steeply with age, term insurance may not be suitable for a client seeking lifetime permanent insurance protection.
Cash value VUL, universal or whole life may be more appropriate.