Whole Life Alternatives

Whole life is just one option for consumers looking to purchase permanent life insurance. Universal and variable life also qualify as forms of permanent life insurance. On this page, we'll define the different types of coverage and explain how they differ.

Conventional Whole Life

When you get whole life insurance quotes, you will most likely see traditional whole life policies. These kinds of policies have the most guarantees. Whole life offers guaranteed annual premiums, death benefits, and cash values. In addition, the dividends from whole life policies may be applied to the death benefit and/or cash value, refunded to the policyholder in cash, or used to lower the premiums of the policy. If you are averse to risk as an investor and are not disciplined about saving, traditional whole life might be your best option.

Variable Life

Before you look for traditional whole life insurance quotes, you should also consider a variable life policy. For savvy investors who are not averse to risk, variable life might make sense. In contrast to traditional whole life, variable life offers very few guarantees but also the largest potential for cash value growth. Variable life policies usually offer a guaranteed annual premium and a minimum guaranteed death benefit. On the down side, variable life has no guaranteed cash value, and policyholders must choose the investments for the policy. The investment options typically include an assortment of mutual funds that might range from aggressive growth to money market funds.

Universal Life

Consumers in the market for whole life insurance quotes might also do well to consider universal life coverage. The main appeal of universal life is the flexibility it offers with regard to premiums. This kind of policy is much more flexible than traditional whole life because policyholders can change their premiums from year to year and sometimes even skip premiums. Universal life offers guaranteed maximum premiums, minimum guaranteed death benefits, and minimum guaranteed cash value. Unlike whole life, universal life policies do not earn dividends. Instead, the policies accrue interest at the credited interest rate the insurer determines annually.