Understanding Whole Life, Universal Life, and Variable Life Insurance

While term life insurance is straightforward, permanent life insurance policies like whole life, universal life (UL), and variable life offer added flexibility and potential cash value growth. Here’s how they differ:

• Whole Life Insurance: Offers a guaranteed death benefit, level premiums, and a cash value component that grows at a fixed rate. Ideal for people who want stable, predictable cash value growth.
• Universal Life Insurance: Offers flexibility in premium payments and death benefits. The cash value grows based on market interest rates, giving you some control over the policy’s growth.
• Variable Life Insurance: Provides a death benefit along with a cash value that can be invested in sub-accounts (similar to mutual funds). This option has higher growth potential but also more risk, as returns depend on the performance of investments.