Permanent Life Insurance Types

Permanent life insurance lasts as long as you live. It is also called "cash-value" insurance. As you make premium payments, the actual cash value of your policy increases. You can borrow against that cash value, or cancel the policy at any time and receive the cash value in return.
 
Permanent life insurance is an investment. Unlike term life insurance, it gains value over the life of the policy. Your insurance company invests the premium payments to build the cash value of your policy. Some types of permanent life insurance let you control how that money is invested.

Different Types of Permanent Life Insurance

The types of permanent life insurance are whole life, variable life, universal life, and universal variable life.

Whole Life Insurance

Whole life insurance has a constant premium and a fixed death benefit. You pay the same premium for the life of the policy, and your cash value increases at a rate guaranteed by the life insurance company. You cannot borrow against your policy, as you can with the other three types.

Variable Life Insurance

If you want the ability to choose your investments, variable life insurance is an option you want to consider. Variable life insurance has a constant premium, but your death benefit depends on how well your investments do. You control how your premiums are invested. If your investments do well, you receive a larger death benefit.

Universal Life Insurance

If being able to change your premium is important to you, universal life insurance is a good choice. Universal life insurance has a flexible premium, and a death benefit that depends on how much you invest. The insurance company controls the investments, and guarantees you a certain rate of return. You choose how much to pay in premiums each month.

Universal Variable Life Insurance

If flexibility is key to meeting your needs, be sure to consider universal variable life insurance. Universal variable life insurance combines the flexible premium of universal life insurance and the investment choice of variable life insurance. You decide how much to invest, and how to invest it. The insurance company does not guarantee the size of your death benefit. It depends on how much you pay in premiums, and how good your investment choices are.

What Type Is Best for My Beneficiaries and Me?

Variable and universal variable life insurance can give better returns, but at a higher risk. Universal and universal variable life insurance give flexible premiums. Whole life insurance lets you pay your premiums with dividend payments once you have built up enough cash value. A life insurance agent can provide you with life insurance quotes for each type of life insurance, and can help you to choose the one that best suits your needs and provides for your beneficiaries.