What is the difference between whole life vs. universal life insurance?

Whole life and universal life are both permanent life insurance policies. Choosing between them can come down to specific features, like how the cash value component works and how much flexibility you want. Generally, whole life is simpler and more predictable, and universal life allows for more flexibility throughout the duration of your policy.

3 min to read

What is whole life insurance?

A whole life insurance policy offers lifelong coverage and a death benefit that your beneficiaries may claim regardless of when you pass away (if you have paid your premium on time). It's the most common type of permanent life insurance.

Is whole life insurance right for me?

Whole life might appeal to you if you're seeking permanent coverage that has set premium payments and a fixed interest rate on the policy's cash value. These policy features make whole life more predictable than universal life insurance, requiring less management overall.

What is universal life insurance?

Universal life insurance, also called UL or adjustable life insurance, is also permanent and will last until you pass away if your premium payments are up to date. Unlike a whole life policy, UL includes features that allow you to adjust your policy. For example, you can increase or decrease your premium or even skip payments if your cash value amount can cover the payment for you. Additionally, the cash value of a universal life policy can increase your death benefit when you pass away.

Is universal life insurance right for me?

Universal life policies are best if you want permanent coverage and a more hands-on approach to managing your life insurance policy. Its cash value carries greater risk and possibly more fees but greater potential reward.

How interest rates differ between whole and universal life insurance

One of the key features of permanent life insurance is the policy's cash value, which grows over time and allows you to borrow from it in the form of a life insurance policy loan.

With a whole life policy, the money from the cash value will grow at a fixed rate, making it simpler and more predictable than other permanent life insurance types.

With a universal life policy, the cash value has an interest rate that's partially based on market conditions and will change over time. You'll have a guaranteed minimum interest rate, though.

Pro tip:

With whole life insurance, if you reach the insurer's maturity date (usually set for when you're 100–120) and your cash value equals the death benefit amount, your insurer will terminate the policy and pay out the coverage amount directly to you.

Comparing whole life vs. universal life insurance

Reference this table for a quick comparison of the differences between whole life insurance and universal life insurance:

Whole lifeUniversal life
Coverage lengthWhole lifeYour lifetimeUniversal lifeYour lifetime
Cash value interest rateWhole lifeFixed rateUniversal lifeGuaranteed minimum rate, with the rest based on market performance
Premium payment flexibilityWhole lifeNoneUniversal lifeAs your cash value amount allows
Cash value's maximum growth potentialWhole lifePays out to you when you reach a certain age (100–120)Universal lifeResults in a zero-cost policy
Cash value's ability to increase death benefitWhole lifeNoneUniversal lifeDeath benefit may increase as cash value amount grows

How to get life insurance through Progressive

You can get a life insurance quote online. You'll be asked some questions, and then you'll choose your coverage amount, term length, and other policy details. You can also call 1-866-912-2477 to speak with a licensed Progressive Life by eFinancial representative who can help you find the right policy for you.

Get a free life insurance quote online in minutes

Learn more about life insurance policies.

Please note: The above is meant as general information to help you understand the different aspects of insurance. Read our editorial standards for Answers content. This information is not an insurance policy, does not refer to any specific insurance policy, and does not modify any provisions, limitations, or exclusions expressly stated in any insurance policy. Descriptions of all coverages and other features are necessarily brief; in order to fully understand the coverages and other features of a specific insurance policy, we encourage you to read the applicable policy and/or speak to an insurance representative. Coverages and other features vary between insurers, vary by state, and are not available in all states. Whether an accident or other loss is covered is subject to the terms and conditions of the actual insurance policy or policies involved in the claim. References to average or typical premiums, amounts of losses, deductibles, costs of coverages/repair, etc., are illustrative and may not apply to your situation. We are not responsible for the content of any third-party sites linked from this page.