What is the difference between Universal Life Insurance and Whole Life Insurance?
Both whole life and universal life products are types of cash-value life insurance. However, there are important differences between them.
· Whole life policies require the payment of fixed, level premiums and provide level death benefits, while universal life insurance policies offer adjustable death benefits and flexible premiums that can be varied according to changing circumstances.
However, whole life insurance policies do show some flexibilityin that policy owner dividends can be used to offset a portion of the premium payment or can be used to increase the policy's death benefit.
· With universal life insurance policies it's easy for policy owners to look at the internal operations of the policy and to examine the relationships among various policy elements (premiums, cash values, interest credits, mortality charges, and expenses) and how they interact with each other. With whole life insurance this is not the case.