Types of Permanent Life Insurance

Types of Permanent Life InsuranceThere are several different types of permanent life insurance, including whole life, universal life, variable universal life, variable life and index-universal life. All of these plans are structured to invest your premium in different ways, and they also have varying structures for payouts.

Traditional Whole Life  

Traditional whole life is a popular choice because it generally offers the most guarantees. Generally, the insurance company promises to pay a certain death benefit upon your death and if you live longer than specified it often pays you the full face value of the policy. The annual premium and minimum cash values and death benefits are all guaranteed.

Universal Life

Universal life provides more flexibility with varying premiums each year. It may even be possible to skip a year. But if a policy holder fails to fund their universal life insurance policy, it may turn out to be temporary, not permanent life insurance.  Some universal life policies offer guarantees for the death benefit as long as specified requirements have been met by the policyholder.

Variable Life

At the least conservative end of the spectrum is variable life. This type offers life insurance protection with varying investment options. Variable life provides the fewest guarantees, but it makes up for that by giving buyers the chance to make larger increases in their cash value. There is no guaranteed cash value.



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