What Is Whole Or Universal Life Insurance? 
Whole Life is designed to last your whole life . Your premiums will cover the the cost of insurance protection until the day you die , or else pay you the money in a lump sum if you do not die by a certain age . Whole Life also has a savings component that allows you to borrow from the cash value , if you desire . Universal Life also has the components of insurance protection -LRB- death benefit -RRB- plus savings -LRB- cash value -RRB- . But UL can be designed in a multitude of ways , and it can be further adjusted while the policy is in existence . E.g. . You might want your Universal Life policy to have a large face amount when your children are in the home , but then reduce the face amount to simply pay for final expenses when you are older . You have the flexibility to do that with Universal Life . Not only that , but when you reduce the face amount , you might be able to also reduce or quit paying premiums . Or you can keep paying the same premium and cause your policy to build up extra cash value . A word of caution when buying Universal Life . It is called permanent life insurance , but it is not guaranteed to be permanent unless you choose a UL policy that states that guarantee . Thankfully , there are guaranteed no lapse UL policies on the market ; even those where you can `` dial '' the guarantee to make the policy last to whatever age you choose . As with Whole Life , if you borrow from the policy , you must pay the money back with interest to ensure that your death benefit will be paid per the terms of the contract . 