Comparison of Types of Life Insurance

  Term Whole Life Universal Life Variable Life Variable Universal Life
Premium Premiums start low, increase at each renewal Level Flexible Level Flexible
Coverage Usually renewable until at least age 70; for some policies, up to age 95 For life For life For life For life
Death benefit Guaranteed Guaranteed Not guaranteed; varies based on interest rates Guaranteed minimum Not guaranteed; total death benefit varies relative to cash value investment returns

May increase with dividends*

Can be increased or decreased

Total death benefit varies relative to cash value investment returns

Can be increased or decreased

Cash value None Guaranteed Guaranteed if minimum premiums are paid Not guaranteed Not guaranteed

May increase with dividends*

Varies based on interest rates

Fluctuates with underlying investment performance

Fluctuates with underlying investment performance

Policy loans allowed? Not applicable Yes Yes

Yes

Yes

May be able to borrow up to 100% of total cash surrender value less annual loan interest rate

Same as whole life, but usually available at lower net interest rate (i.e., pay the interest rate and get a credit back to the policy) Same as whole life, but usually available at lower net interest rate (i.e., pay the interest rate and get a credit back to the policy) Same as whole life, but usually available at lower net interest rate (i.e., pay the interest rate and get a credit back to the policy)
Cash withdrawals allowed? Not applicable No Yes No Yes
Cash value account growth No cash value account Insurance company determines guaranteed cash value and declares dividends based on performance of its general investment portfolio* Insurance company determines cash value interest crediting rates based on current interest rate returns to the company Cash value account growth depends upon the investment performance of the subaccounts you choose Cash value account growth depends upon the investment performance of the subaccounts you choose

*Dividends are not guaranteed.

Note: Any guarantees associated with payment of death benefits, income options, or rates of return are based on the claims-paying ability of the insurer.

Note: Policy loans and withdrawals will reduce the policy's cash value and death benefit.