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Universal Life Insurance vs. Whole Life Insurance

Universal life and whole life insurance are both types of permanent life policies, but there are several noteworthy differences between them. Compared to whole life insurance, a universal life policy is more flexible because it allows you to change your premiums and death benefit to better suit your needs. Here’s what you should know about universal life insurance vs. whole life insurance so you can decide which plan is right for you.

What is universal life insurance?

If you invest in universal life insurance, this policy will last for your entire life if you continue paying premiums. Your premiums and death benefits won’t be set in stone, meaning you can adjust them as your circumstances change. Depending on the type of universal policy you choose, you may also have a cash value component, which allows you to take out money through a loan or withdrawal while you’re still alive.1

What is whole life insurance?

A whole life insurance policy is similar to universal life insurance in that it also includes a death benefit and cash value that remain active for your entire life. However, its premiums and death benefit will stay the same over time. Once you commit to a policy, you won’t be able to change them.2

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Differences between whole life and universal life insurance

Here’s a closer look at how whole life and universal life insurance differ:


One significant difference between whole and universal life insurance is that a universal life plan is more flexible. Your premium payments and death benefit can be adjusted with a universal life policy, while they can’t change with whole life insurance.3


Since the premiums and death benefit are guaranteed to stay the same, and the cash value has a minimum guaranteed rate of return,4 whole life insurance has higher premiums than universal life insurance.

Cash value accumulation

Whole life insurance comes with a guaranteed cash value over the life of the policy. Universal life insurance can also build cash value, but it may fluctuate based on factors like the way you fund it and the investments your life insurance company chooses.3


You can receive dividends from a whole life insurance policy. If you do, you may add them to your cash value or withdraw the funds. Universal life insurance does not offer dividends.

Should I get whole life insurance or universal life insurance?

Whether you’d be better off with whole life insurance or universal life insurance depends on your unique situation. If you want your premiums, death benefit, and cash value to be guaranteed and don’t mind paying extra for this convenience, whole life insurance is likely your best bet. But if you’re searching for a more flexible policy, you might want to consider universal life insurance.

Alternatives to whole life and universal life insurance

Here are some alternatives to whole life and universal life insurance:

Term life insurance

Term life insurance will last for a limited period of time, like 10, 20, or 30 years. If you pass away before your policy expires, your beneficiaries will collect a death benefit.

Guaranteed issue life insurance

Guaranteed issue life insurance doesn’t require a medical exam. In many cases, you’ll be accepted for it if you apply and be able to support your beneficiaries financially upon your death.

Final expense insurance

Final expense insurance helps your beneficiaries pay for end-of-life costs and final expenses after you pass away. These might include medical debts and funeral and burial fees.

Simplified issue insurance

With a simplified issue life insurance plan you don’t have to take a medical exam and may get approved once you fill out several questions about your health.

Get a quote for life insurance

Both universal and whole life insurance offer lifelong coverage, but it’s wise to consider their differences when deciding on a policy. Additionally, there are plenty of alternative options to consider, such as term life and final expense insurance, if another policy would better suit your needs.

Aflac offers term and whole life insurance policies with great coverage. Both options can allow you to protect your loved ones financially in case the unexpected happens. Get a quote today!

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