Whole Life Insurance Vs Variable Life Insurance

Once you have decided that you want life insurance, the next step should be what type of life insurance you need. Outlined in this article are the comparisons between two whole life insurance and variable life insurance


Whole life insurance gives you a guaranteed premium throughout the duration of the policy. Irrespective of market inflation, your whole life insurance premium is not expected to change. In contrast to whole life insurance, variable life insurance does not offer you a fixed premium. You could choose to increase or decrease your premium to favor your finances at the time. There are even situations where you might need to pay extra premiums such as when the value of your variable life insurance policy drops. Paying extra premiums at this time ensures that you can keep your variable life insurance plan.

Cash value

Like whole life insurance, variable life insurance allows you to build up your cash value. But this is where the similarity ends. With the whole life insurance cash value, you are allowed to only borrow and withdraw against your policy. Variable life insurance, on the other hand, allows you to invest your cash value in a variety of investments ranging from stocks to mutual funds. In addition, the interests you earn from these investments can significantly increase or reduce your variable life insurance cash value.

Death benefit

While whole life insurance guarantees your death benefit, variable life insurance offers no such service. When you invest your premiums in variable life insurance, your returns on investment might positively or adversely affect your death benefit. However, if you want a guaranteed death benefit in your variable life insurance policy, you would have to pay extra premiums.