Provides Death Benefit for the least amount of money initially.

Not the best choice if need for life insurance is longer than policy term

Good choice for those who want protection for a certain amount of time or for a specific purpose.

Premium increases dramatically after the original policy term.

Policy is fully guaranteed – guaranteed premiums, guaranteed death benefit and guaranteed renewable. 

No accumulating cash values for loans or emergencies.

Can be converted to permanent insurance within the first 10 years or before age 65.

No flexibility in premium payments.

Provides a measure of guaranteed insurability, even though premium is high at older ages.

Can add term insurance protection to the policy on the lives of children.

Guaranteed level premiums, which help you budget.

Higher initial cost than term insurance.

Increasing cash value, which grows tax-deferred.

Does not take advantage of high market conditions.

Cash value can be borrowed as a source of emergency funds.

People lose their group term insurance at retirement; permanent life insurance stays with them.

Life insurance death benefits can be used to increase pension benefits for the retiree.

Offers guaranteed insurability option that allows insured to buy more insurance regardless of the future state of health. Good benefit for children’s policies.  

Guaranteed cash value, plus non-guaranteed dividends.

Little flexibility in premium payments.

Offers guaranteed insurability, Guaranteed Insurance Option enables insured to purchase additional insurance regardless of state of health. Good benefit to purchase for children. 

Does not require ongoing monitoring of investment choices.

The difference in permanent life insurance plans is primarily the length of time you pay premiums.

Executive Whole Life (EWL)

Lowers premiums compared to 20-pay and LP-65, but payment of premium is required for a longer period of time.

20-Pay Life

After making 20 equal annual payments policy is paid up.

Shorter length of time to pay premiums as compared to EWL.

Good way to give paid-up policy to kids when they leave home or to grandchildren.

45 year-old or younger can have permanent protection, but make no further payments during retirement years.

Can be set up as a single payment policy.

Life Paid Up at 65 (LP65)

Good way to plan for retirement because protection is permanent but requires no further payments after age 65.

Can be paid up in fewer than 20 years, or stretched out longer.

Single Premium

Whole life

Make one lump-sum payment and have a paid-up policy. The policy continues to increase in value over time, but you don’t pay income tax on the accumulating cash value.

Excellent policy to transfer money to the next generation. Pay a portion of your assets for life insurance to leave a much greater amount to your heirs.

Good choice for families who anticipate changing needs or uncertain life events in the future.

Policy can lapse if premium payments are not sufficient.

Can adjust the amount of life insurance protection to keep pace with lifestyle changes.

Interest rate applied to cash value can vary more than with whole life policies.

Can change the amount and frequency of premium payments to increase or decrease the cash value or coverage.

People with middle to upper incomes who are concerned about how their excess income is invested appreciate Universal Life.  

There are three types of Universal Life policies.

Flexible Premium Universal Life Insurance

Security of principal rather than riskier investment options. Policy contains a five-year no-laps guarantee. As long as minimum premiums are paid, there is guaranteed life insurance protection for the first five years, regardless of the account value. 

Guaranteed minimum interest rate, so the principal is protected.

Variable Universal Life (VUL)

For policy owners who have more tolerance for investment risk.

Potential loss of principal in adverse market conditions.

Long-range potential for greater growth than Universal Life.

Fluctuations in market increase the probability that higher premiums will be required to keep the policy in force.

No guaranteed minimum interest rate.

Survivor Universal Life (SUL)

Used primarily for estate planning and to pay estate taxes.

Uncertainty about estate taxes depending on individual circumstances.

Good choice for business continuation, or to help compensate heirs not involved in the family business.

Fluctuation s in interest rates credited to cash values.

Insures two lives, but only pays at the second death (minimum issues is $100,000).

Premiums are lower than buying two policies because only one death benefit is being funded.

Life insurance protection may be available to someone who may otherwise be uninsurable, since benefit is paid only at the second death. 

Allows insured to leverage estate by using part of it to pay insurance premiums and leave a much greater amount to heirs.