What Is Universal Life Insurance Vs Whole Life? 
Whole Life and Universal Life are the two main types of permanent insurance coverage -LRB- there are sub-categories with in that - e.g. guaranteed universal life , current assumption universal life , indexed universal life , participating whole life , non-participating whole life , and others -RRB- . Permanent life insurance , in general , is designed to provide coverage for the rest of the insured 's life and build cash value . Universal life insurance features a flexible premium structure It 's , in short , a blend between term life insurance and whole life insurance . A universal life policy will guarantee the maximum death benefit for the lowest possible premium -LRB- making it much less expensive than a whole life policy with the same death benefit -RRB- . Like with whole life insurance , universal life will build cash value , although it will generally not accumulate as much cash value over the life of the policy as a comparable whole life policy it is essentially term insurance to age 121 , with the emphasis on a larger death benefit instead of greater cash value for the premium that you are paying . Universal life is ideal for anyone who wants to maximize the death benefit and is n't worried about building cash value . You can guarantee benefits up to age 121 -LRB- with most companies -RRB- - these policies can be structured to dial down the death benefit to a specific age as well -LRB- e.g. to age 90 , 95 , 100 , 105 , etc. -RRB- , which can reduce your premium by a good margin . Whole life insurance is a great vehicle for planning for the future . The premiums and death benefit remain fixed and guaranteed for life while the policy can build cash value at a great rate - this structure is known as a non-participating whole life policy . The other type is called participating whole life policy . Participating WL policies can pay out dividends which can be used in several ways : 1 -RRB- Decrease the premium - the premium would eventually hit $ 0 at some point and the policy would , in essence , be self-sustaining meaning the dividend is equal to or greater than the premium for the program -LRB- if greater , the difference can be used to increase the cash value or increase the death benefit -RRB- 2 -RRB- Purchasing paid-up additions - these additions increase the face amount of the policy 3 -RRB- Increase the cash value at a faster rate While whole life has many advantages , it is also the most expensive form of life insurance . Whole life features level premiums and death benefits and builds cash value at a faster rate than Universal life policies - the trade off between is that to increase the cash value faster , the premiums will be substantially higher -LRB- can often be 2-3x the premiums of guaranteed universal life policies on many occasions -RRB- . Please note , regardless of the permanent coverage type , the carrier takes back the cash value upon the death of the insured , and pays out the death benefit proceeds . Therefore , guaranteed Universal life policies allow you to maximize your death benefit and minimize your premium dollars that you pay for the coverage . I hope the information is helpful - please feel free to contact me for assistance with your coverage and if you have any other questions . Thanks very much . 