• Whole vs Term

Universal or Whole Life

Universal Life insurance is permanent life insurance with a flexible premium structure and the ability to build cash value.

  • You can set your premium amount and payment schedule provided they are sufficient to support the death benefit and sustain the policy.
  • Your payments above the cost of insurance are credited to the policy's cash value, which in turn earns monthly interest.
  • The policy cash value is yours. You may allow it to accumulate, withdraw or borrow against it, or use it to pay policy premiums.


  • Growth - You receive a guaranteed minimum rate of interest on the policy's cash value.
  • Flexibility - You may increase or decrease planned premiums within certain limits. After the first policy anniversary, you may also adjust the death benefit, though evidence of insurability may be required for increases, and minimums apply.
  • Tax Advantages - Credited interest is tax-deferred. The death benefit is typically income-tax free and may be estate-tax free if the policy is owned within a properly structured trust.
  • Access to Cash Value - The cash value of your policy is available through tax-advantaged loans and withdrawals, subject to minimum and maximum amounts.
  • Affordability - Because Universal Life is designed for the long term, premiums may be more economical than certain other life insurance products.

Who needs Universal Life coverage?

Consider a Universal Life policy if you:
  • Are interested in cost-effective, permanent life insurance
  • Seek a low-risk product with earning potential
  • Have wealth transfer or income protection needs
  • Are a small business owner with a business or personal need for death benefit protection

How does a Universal Life policy work?

  • Your net premium, after loads and taxes, is applied to the policy account value.
  • Interest is credited to the account value.
  • Monthly cost of insurance, administrative charges, per $1,000 charges and any additional rider charges are deducted from the account value. These charges vary by individual policy parameters.
  • The death benefit, minus any outstanding loans and accrued loan interest, is paid at death.

Universal Life policies provide a minimum guaranteed interest rate. However, this is not a guaranteed “rate of return” due to the effect of policy charges.

Term Life Insurance

Term life insurance is basic life insurance coverage that provides protection for a specific period of time ("term"). It may be a suitable life insurance product if you need short-term death benefit protection and have temporary financial obligations, such as mortgage payments, car payments, or short-term debts. Coverage provides lower premiums for people who cannot afford permanent life insurance premiums. Should you decide you want permanent life insurance, you can convert your policy later on (within certain parameters).

  • Death Benefit - Provides level death benefit that becomes payable only if the insured dies during the term of the policy; it is not guaranteed for the insured's lifetime.
  • Lower Premiums - Generally a way to afford life insurance coverage at less expensive premiums than other types of life insurance because it allows you to purchase higher levels of coverage at a younger age, when your protection need is greatest. However, term premiums may increase with age.
  • Tax Advantage - Upon the death of the insured, the death benefit of a term insurance policy generally passes federal income tax-free¹ to the policy's beneficiary.
  • Guaranteed Level Premium Payments - Level premiums are guaranteed for a pre-determined period of time. You can specify the frequency, often a choice of annual, semiannual, quarterly, or monthly.
  • Renewal and Conversion Options - Annual renewal at increasing term rates at the end of the original contract period. Some term policies can be converted to permanent insurance (within certain parameters).

¹ The death benefit may be included in your estate for federal estate tax purposes.

Back to top