Permanent life insurance provides lifetime coverage and has cash value. Whole Life and Universal Life Insurance are the two main types of permanent life insurance.
What is Whole Life Insurance?
Whole life insurance is usually better for people wanting permanent life insurance with guarantees. Whole life insurance premium payments and death benefits do not change or increase with age.
| Whole Life Insurance | Universal Life Insurance |
| For people who like guarantees | For people who like flexibility |
| The premium never changes | Premiums can change if needed |
| There’s a guaranteed death benefit | The death benefit can change |
| Cash value growth is guaranteed | Cash value can change |
| Whole life insurance policies usually cost more than universal life insurance. | Universal life policies are usually less expensive than whole life policies. |
What is Universal Life Insurance?
Universal life insurance is better for people that like a permanent life insurance that offers flexibility. Universal Life Insurance premium amount, death benefit and cash value can change depending on various factors.
Premiums can vary. You can adjust your payments up or down within certain limits. This makes it easier to maintain your coverage if your situation changes. But you may eventually have to pay higher premiums to keep your policy in force.
Universal life policies are usually less expensive than comparable whole life policies.
What is the difference between Permanent Life Insurance and Term Life Insurance?
A permanent life insurance policy provides coverage for your entire life, but term insurance covers you for a set number of years. Term insurance does not have cash value, but permanent life insurance has a cash value that can be used as a policy loan or paid out in another manner.