Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

Full Bio →

Written by

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insur...

Full Bio →

Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Aug 3, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance provider and cannot guarantee quotes from any single provider. Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance related. We update our site regularly, and all content is reviewed by life insurance experts.

The Brief

  • Between whole life insurance and universal life insurance, whole life insurance is usually the more expensive option. With universal life insurance, the rates aren’t fixed and will likely increase over time
  • Whole life insurance policies are more stable and secure while universal life insurance is more flexible

If you’re looking for long-term life insurance coverage, choosing the best permanent policy for your coverage needs is important. Whole life insurance and universal life insurance are both types of permanent life insurance policies you can buy.

But what are whole vs. universal life insurance policies? And which is better, whole or universal life insurance?

Find out everything you need to know about whole life insurance and universal life insurance by reading through our comprehensive guide.

Looking to compare whole vs. universal life insurance quotes? Enter your ZIP code above to get free life insurance quotes from local companies near you.

How much are whole vs. universal life insurance rates?

Whole life insurance tends to be more expensive than universal life insurance, but your personal rates will be affected by several factors, including your death benefit amount, sex, health status, and age.

Take a look at the difference between whole vs. universal life insurance rates for a 30-year-old male in good health:

  • Buying a $500,000 universal life insurance policy would cost around $367/mo, but;
  • A $500,000 whole life insurance policy would be around $521/mo.

Although whole life insurance tends to be more expensive than universal life insurance, the rates for whole life insurance are fixed. The rates for universal life insurance are usually cheaper at first but will typically increase over time.

Why is whole life more expensive than universal life?

Although both whole life insurance and universal life insurance are permanent policies, whole life insurance is considerably more expensive to buy.

One of the reasons why whole life insurance is more expensive to purchase is because the cash value grows at a much steadier rate than the cash value in universal life insurance.

Whole life insurance policies also have more security and predictability, and the policy’s fixed rates also help to contribute to the cost of whole life insurance.

Compare Quotes From Top Companies and Save

 Secured with SHA-256 Encryption

What are whole vs. universal life insurance policies?

Whole life insurance and universal life insurance policies are both permanent life insurance options that provide policyholders with long-term coverage.

The biggest difference between whole life insurance vs. universal life insurance is that whole life is a fixed and stable policy whereas universal life offers more flexibility.

Whole life insurance provides lifelong coverage with set rates and a cash value. This means that your life insurance rates won’t go up over time and you can cancel your policy and receive its cash value easily.

Universal life insurance also has a cash value, and the policy is generally very flexible. You have the option to adjust your life insurance rates using your policy’s cash value, and your life insurance death benefit can also be adjusted as well.

Both whole life insurance and universal life insurance have a surrender period. During this period, if you take out any of your policy’s cash value or cancel your policy altogether, you will have to pay a surrender charge. This surrender period usually lasts up to 10-20 years, but it can vary from policy to policy.

What are the disadvantages of universal life insurance?

Although universal life insurance offers more flexibility, it does have a few disadvantages.

With some types of universal life insurance, your cash value can fluctuate depending on the current market, and, unlike whole life insurance, universal life insurance rates aren’t fixed.

Universal life insurance also typically has more fees than whole life insurance does.

If you want to increase the death benefit amount on a universal life insurance policy, you may have to take a medical exam which can raise your life insurance rates.

This could prove to be an inconvenience to individuals whose health has declined since purchasing their policy as well as individuals who can’t afford to pay higher rates.

Should I buy whole life insurance or universal life insurance?

Whole life insurance and universal life insurance are both good permanent policy options, but the right policy for you will depend on your coverage needs and your budget.

Whole life insurance is a great option for people who want a simple policy with level rates and a cash value that grows steadily.

It’s also helpful for people who are worried their health may decline in the future. With whole life insurance, you won’t need to retake a medical exam if your health changes during your coverage period.

Universal life insurance is more flexible and is generally cheaper to buy than whole life insurance is, making it a good choice for people who want a more affordable life insurance policy that they can adjust at any time.

With universal life insurance, the rates can be adjusted to be lower or higher depending on what your budget is at that time. This option can be helpful for people who don’t have a steady income.

Start shopping for affordable whole vs. universal life insurance options right now. Enter your ZIP code below to get free quotes from the top whole vs. universal life insurance companies in your area.