Product Comparison Guide
Good, Better, Best?
There’s no one-size-fits-all solution when you’re planning for your loved ones’ financial security. The type of life insurance that’s best for you depends on several factors, including your goals, your income level, and your life stage (for example, starting out, raising a family, or beginning retirement). Life insurance needs change over time, so it’s important to review what you have, especially when you experience major life events.
The chart below illustrates the main differences among the three common categories of life insurance products.
|Term Life Insurance||Whole Life Insurance||Universal Life Insurance|
|Definition||Pure death benefit protection for a specified period||Permanent1 insurance — Death benefit plus cash value||Permanent1, flexible insurance — Death benefit plus cash value|
|Death Benefit1||Fixed and permanent1||Fixed and permanent1||Adjustable|
|Cash Value||None||Yes||Guaranteed minimum and nonguaranteed, interest-sensitive rate|
|Death Benefit||Affordable||Guaranteed throughout the entire life of the insured||Adjustable with two options — May be guaranteed throughout the entire life of the insured|
|Premium||Least expensive type of insurance||Fixed and level||Flexible and can be guaranteed through insured's lifetime|
|Cash Value||None||Guaranteed||Potential for greater cash value accumulation|
|Death Benefit||Coverage terminates on specified date||Fixed and permanent||Flexible and permanent|
|Premium||Likely to increase after initial term||Not flexible — Higher than term insurance||Generally higher than whole life to accommodate flexibility|
|Cash Value||None||Slow growth||Portion of growth is related to current money market conditions|
|Other||Can pay more in premium than the death benefit amount||Great guarantees, but you have to pay higher premium||Must keep the policy properly funded to avoid lapse|
1 Subject to payment of premiums as they come due. Loans and/or withdrawals will decrease death benefit.