The short version
Term is temporary and affordable. Whole life is permanent with guarantees. IUL is permanent and flexible, with index-linked crediting and fewer guarantees.
Term life
Covers a set period, usually 10–30 years, with level premiums and generally no cash value. It is often the most cost-effective way to protect a family during working years.
Whole life
Lasts a lifetime with fixed premiums and guaranteed cash value growth. Participating policies may pay dividends, which are not guaranteed. It costs more than term for the same death benefit.
Indexed universal life
Permanent coverage with flexible premiums. Cash value earns interest based partly on an index, subject to caps, participation rates and a floor, while charges are deducted monthly. Performance depends on design, funding and crediting, and policies need periodic review.
How to choose
Match the type to the need: temporary needs often suit term; lifelong needs or long-term accumulation goals may suit permanent coverage. Many families combine policies.
FAQs
Which is cheapest?
For the same death benefit, term is usually the least expensive.
Which builds cash value?
Whole life and IUL can build cash value; term generally does not.