Type Description Need Death Benefit Premium
Annual Renewable Term "Pure" life insurance with no cash value element; highest death benefit for the lowest premium Short to intermediate term need Fixed, level Increasing, exponential
Whole Life Known maximum cost and minimum death benefit levels; dividends may reduce premiums Anyone who needs lifetime coverage Fixed, level Fixed, level
Variable Life Whole life contracts; choice of investment assets; death benefits depend on investment result, but with guaranteed minimum Need for investment performance Guaranteed minimum; can increase based on investment performance Fixed, level
Universal life A&B Flexible premium current-assumption adjustable death benefit policy; policy elements unbundled; two death benefit options (A & B) Flexible premiums and benefits Adjustable; Option A - Ordinary Life; Option B - Ordinary Life plus term rider equal to cash value Flexible option of policy owner
Universal Variable Life Features of universal and variable life Need for performance and flexibility Adjustable Flexible option of policy owner

Type CV or Dividend Use Current Interest Cash Value Advantages to Owner Disadvantages to Owner
Annual Renewable Term - None Low premium for coverage Increasing premium; most term insurance is lapsed
Whole Life yes Fixed Predictable; forced savings and conservative investment Higher premiums
Variable Life - Based on investment performance; not guaranteed Combines life insurance and investments on excess premiums All investment risk to owner
Universal life A&B Yes Varies depending on face amount and premium; not guaranteed Flexible Some investment risk to owner
Universal Variable Life - Varies depending on face amount, premium and investment performance Flexibility and investments All investment risk to owner; greater mortality risk to owner

Contractual Provisions

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