Comparing the Different Types of Permanent Life Insurance

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Sep 24, 2020

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Permanent life insurance comes in several different types. Each one has benefits that the others lack, and gives you more or less control over how the policy behaves. The premiums will vary depending on the type of policy, and pay close attention to how the policy works for you.

Permanent Insurance

This policy will remain effective throughout your entire life as long as the premiums are up to date. In addition to the death benefits, a permanent life insurance policy may also include other benefits such as accrued cash value. This type of policy is also referred to as whole life insurance.

Universal Life Insurance

This type of policy is whole life insurance with more flexibility than a standard permanent life insurance policy. You have the option of setting many different factors, including the premiums, the amount of coverage and other details.

Indexed Universal Life

This is a universal life insurance policy in which the premiums are invested in mutual funds or other investments. An indexed universal life insurance policy has the potential to gain or lose accrued value, and generally prevents the value of the policy from going below the original face value.

Variable Life Insurance

This type of policy is similar to an indexed universal life policy. The policy holder may or may not have any say in how the investments are made. The policy is usually written to guarantee that the face value will not dip below a specified amount.

Variable Universal Life Insurance

This type of policy combines the flexibility of a universal life policy with the investment potential of a variable life policy. This policy is also referred to as universal life II or flexible premium life insurance.

Last Survivor Universal Life insurance

This type of policy is commonly used specifically to pay estate taxes and other expenses related to closing out your estate. The policy names two insured parties and only pays out when both have passed away. Last survivor insurance is also known as survivorship or second-to-die insurance.

Single-Premium Whole Life insurance

As the name implies, this is a whole life policy which is purchased outright in one single lump-sum premium payment. The advantage of this type of policy is that that it is much less expensive because the whole policy is paid for at once, allowing the premium investment to begin accruing interest on the account immediately.

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