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# Which is better: Term, Universal, or Whole Life Insurance?

Sep 28, 2021

 

Life insurance is never a one-size-fits-all kind of. You have quite a few options available when it comes to choosing life insurance. How will you know which is the best for you to choose? 


If you are looking for the most affordable and straightforward life insurance, then term life insurance is the best option for you. Like universal and whole life insurance, permanent life insurance products are more complex, have many features, and are more expensive. We’ll discuss the differences and benefits of different life insurance products so you can make an appropriate decision for yourself.


Term Life Insurance


Term life insurance is protection for your family against financial hardship if you die unexpectedly. Term life insurance helps you to secure your financial future in the face of adverse and unpredictable events. Such policies usually have a specific time period assigned to them, also known as the “policy term” of the plan. In case the policyholder dies during the policy term, the nominees listed under the insurance policy receive the sum assured of the policy. This policy does not have a maturity value. It means that in case the plan completes its term and the life assured is still alive, no benefit will be paid to the nominee. The cost of any life insurance policy is ultimately based on your age and health status, but if we compare all, then term life insurance has the lowest premiums.


Universal Life Insurance


Universal life insurance is a type of permanent life insurance that concentrates more on flexible premiums than cash value growth. This insurance is also called adjustable life insurance because of the flexibility it offers. You have the liberty to reduce or increase your death benefit and pay premiums at any time in your convenient amount once there is money in the account. When you pay to your universal insurance plan, part of it goes into an investment account, and any interest accumulated is credited to your account. The interest you earn grows on a tax-assessed basis, increasing your cash value. You can adjust the death benefit when needed if your circumstances change. Universal life insurance can be helpful if your budget changes and you need to lower your premiums.


Whole Life Insurance


Whole life insurance is the most well-known type of permanent life insurance policy. Whole life insurance is the least complex type of permanent life insurance policy, but it’s often the most expensive. Compared to other permanent life insurance products, whole life insurance is a bit more convenient and has less risk. In this insurance, the premiums are fixed, so you know what amount of premium you will be paying the policy's entire life.

So, neither is categorically better than the other. The real question is, which one proves to be better for you?


This depends on your family structure, financial situations, and goals; whether term, universal, or whole life insurance is better for you. Considering all, term life insurance is best for most families because of its affordability and simplicity. Being educated and knowing the main difference between the policy, it’s time for you now to start.