Are you not sure how whole life insurance is different from universal life insurance? Here's what you need to know! Universal life insurance and whole life insurance both come under the category of permanent insurance policies. These insurance policies last throughout your life span as long as you’re paying your premiums. Moreover, both the policies build significant cash value over time, against which you can borrow tax-free loans. But what is the difference between the two policies? And which one should you choose to buy? Keep reading to learn all you need to know! Whole Life Insurance Whole life insurance is a policy that offers fixed premiums, which means you will be paying a fixed annual amount for your coverage. This policy also offers the opportunity to accumulate cash value over a period you can borrow against.   To sum it up, a whole life insurance policy offers life protection along with the option of accumulation. This policy would be is best suited if you're looking for:

• Fixed premiums throughout the policy
• Cash value accumulation that you can tap into while you’re alive
• Everlasting protection as long as you pay your premiums on time

Universal Life Insurance Universal life insurance is a policy that offers flexible premiums. It means that you can adjust and change how much you pay annually in accordance with the cash value that you have. However, you are required to meet a minimum payment requirement on these premiums. The universal life insurance policy would be a good choice if you’re looking for:

• Flexible annual premium payments and the coverage amount
• Cash value accumulation that you can borrow from
• Permanent protection for life and access to the cash value

Difference between whole life insurance and universal life insurance In order to understand the difference between the two policies, you’ll need to know the benefits that each offers. Let’s look at them in further detail! Benefits of whole life insurance

• All cash value accumulation is tax-deferred
• You can take loans against the cash value during your life.
• The premium payments are fixed throughout, so it helps you budget your payments consistently.

 Benefits of universal life insurance

• The premium payments are not fixed. Depending on your cash value goals, you can adjust, skip, and change your payment amount as long as it covers your expenses and meets the minimum payment requirement.
• Some policies offer the option of changing the amount of death benefit (either increasing or decreasing it) depending on your current circumstances.
• Most policies give you the option to borrow against the cash value.
• The interest that you earn over time accumulates tax-deferred.

Final words Depending on your circumstances and what you’re looking for in a policy, you can choose between universal life insurance and whole life insurance. Make sure you compare the benefits and choose what’s best for you.