An Assessment of Whole Life Versus Universal Life Insurance Products

The debate regarding the benefits of Whole Life (WL) vs. Universal Life (UL) began when UL was introduced in the early 1980s. This debate—waged by loyal advocates for each respective product—has continued ever since. Here, we compare and contrast these two different life insurance products with an analysis that begins with a review of the underlying risk transfer and product mechanics, continues with an examination of illustrated performance, and concludes with a summary of strengths and challenges for both products.

Though WL and UL are two different types of life insurance products that provide death benefit coverage for an insureds entire life (versus a specified term), they share many similarities. No one product is superior for all cases, with the specific case and client risk/reward tolerance driving the best product solution. In addition, there are some popular myths (i.e., misunderstandings) regarding both products. Specific differences/similarities, can be found in this supplement Due Care Bulletin - Comparing WL and UL: Common Questions and Answers.

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