Life insurance premiums are the amount of money you pay to an insurance company to keep your policy active. Whole life insurance premiums typically remain the same from the time your policy is issued until your death. While term life insurance is designed to help provide some financial protection for a specified period, whole life insurance is designed to help provide coverage for your entire lifetime.
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What are the benefits of whole life insurance?
Whole life insurance policies can cover you for the entirety of your life as long as the premiums are paid timely. With most whole life policies, cash value accumulates within the policy over the years you are alive and paying your premiums. Depending on the policy terms, you may be able to eventually use the cash value that has accumulated in the policy to pay some of your premiums.
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Another benefit to whole life insurance is that you may be able to borrow money from your policy’s cash value. Money borrowed from your whole life insurance policy may be easier to access than a traditional bank loan. Generally, however, this will decrease the death benefit, if the policy loan, plus interest in full, is not paid back before your passing.
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What is variable life insurance?
Variable life insurance policy premiums can be adaptable, potentially allowing you to change the amount of your premium payments.
3 The death benefit is the amount paid to your beneficiaries upon your death. With variable life insurance the cash value will vary based on the amount of premiums paid, the policy fees and expenses, and the investments made during the life of your policy.
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What makes universal life insurance different?
Some forms of universal life insurance may allow you to adjust your premium payments.
5 In other words, the premium for universal life insurance is flexible. Many universal life insurance policies also have a cash value component. That cash value may earn interest.
5 The cost of universal life insurance will go up every year as you age.
5 Also, there can be administrative fees charged by your insurance company to maintain computer systems, manage the investments, claims payments, or other affiliated fees.
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What are some pros and cons of term life insurance?
Most term life insurance premiums remain the same for the length of your policy, typically 10-30 years.
6 If you die within that term, your beneficiary will receive the policy benefit known as a death benefit. If you die after the policy term has ended, a benefit will not be paid as the coverage will no longer be in force. Occasionally, insurance companies will allow term life policyholders to convert their policy into a whole life policy within a certain window of time.
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- New York State – Department of Financial Services, Types of Life Insurance Policies, Accessed 2025
- LegalClarity.org, What Happens to the Cash Value of Life Insurance When You Die?, 2025
- AccountingInsights.org, Understanding Variable Life Insurance: Key Features Explained, 2024
- Investor.org, Variable Life Insurance, Accessed 2025
- Maryland Insurance Administration, Universal Life Insurance, Accessed 2025
- Insurance Information Institute, What are the Different Types of Term Life Insurance Policies?, accessed 2025
- Forbes, What to Know about Converting Term to Whole Life Insurance, 2025
United American Staff
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