What Is The Best Permanent Life Insurance Policy? 
Determining which permanent life insurance is `` the best '' comes down to your specific needs . There are several different types of permanent life insurance available including Universal Life , Indexed Universal Life and Whole Life . Of these three main types , Universal Life has the lowest premiums . Universal Life can last your entire lifetime and would typically be considered the most basic type of permanent life insurance . Indexed Universal Life and Whole Life are two other types of permanent life insurance and each one can have cash value build-up inside the policy . The cash build-up is calculated differently in each of these types . For an Indexed Universal Life policy , you pay a premium that more than covers the cost of insurance and the excess cash builds up inside the policy . That buildup of cash is credited interest based on an index or combination of indices and how they perform over time . Your cash value is never in the market but can grow if the market is up year-over-year . The IUL can be designed to build up a large cash value over the years and that cash value grows tax deferred . If you need cash along the way , you can get a loan against your policy and use it for your own needs . Many people use an IUL to build cash value for college expenses or to supplement their retirement income . Whole Life insurance policies generally offer fixed premiums . In a participating whole life policy , the cash value inside the policy increases as the insurance company provides dividends based on the overall return on its investments . Earnings beyond those needed to cover policy expenses go to the policy 's cash reserve from which you can use to cover future premiums or borrow against during life 's journey or to supplement retirement income . 